Mid-40s, newly separated. First time buyer advice.

elsmandino

Hi there.

I have found myself in the rather sad position that I have separated from my partner and our son and I am having to find somewhere else to live.

My current property was mortgage free (it was inherited by my partner), so I have a fairly substantial amount of savings (about £160k) that was saved up whilst I was living there.

I have never purchased a property before and completely naive (at 45) in terms of where to start.

I want to stay fairly close to my current area, so I can regularly see my son, but (as I am in the South East), properties are really expensive.

I am clearly going to need a mortgage, now.

A few initial questions:

1. How important is it to try and be mortgage free again?

I am able to find 2-bedroom flats for around £180,000.00 - £200,000.00, so I should be able to pay that off relatively quickly.

A proper house, however, is going to be at least £300,000.00.  

I guess I have to take into account, whether I want to be in a flat in 15 years time.

If I live on my own (with my son regularly visiting), do I really need 3 bedrooms?

2. I realise that, at my age, mortgage lenders are going to slightly more wary of lending to me.  Say I go for a flat and need to borrow £150,000.00 - how do I calculate how long to borrow for?  Is this simply based upon the monthly amount that I can afford to pay per month or is it more complicated than this.

I am in a job that is only averagely paid and am confident that I should be something better in the very near future.

Any general advice would be much appreciated - feel a bit like a rabbit, caught in headlights, at the moment.

janoid19

I would go to a mortgage advisor and they can help you work out how long you would like the term to be and how much you will be able to borrow.

At 45 I think you could still get a relatively good term of 25 years. I am 33 and we have our new mortgage over 37 years which is the longest we could gett (to keep monthly payments as low as possible) and then we just plan on overpaying whatever we can.

Albermarle

I am in a job that is only averagely paid and am confident that I should be something better in the very near future.

The mortgage affordability can only be calculated on your current income.

With flats you have the issues of them being leasehold. Lots of stories on here about problems with freeholders, management companies, unexpected bills etc.
In larger blocks there will be annual service charges which generally have been increasing a lot recently.
Possibly no garden access.

So a freehold house is usually better, and smaller two bedroom ones do exist. 

This could be of interest.
First-Time Buyer Guides - MoneySavingExpert

NameUnavailable

First step speak to a mortgage broker to get a good idea of what you can afford - your age isn't an issue it will be down to income and outgoings. You have a large deposit so that will also help and you may well be able to afford a house.

If you buy a flat my advice is to look for a shared freehold (with long lease and peppercorn ground rent), ideally a building of no more than 4 floors (i.e. under 11m) and one with formal managment arrangements rather than ad hoc pay as you go repairs.

Maisonettes and garden flats may offer you private outside space if that's important.

If you can stretch yourself to a 2 bed house then that's probably the better solution but remember you need money to live on and don't want to be worrying about paying a hefty mortgage each month.

ian1246

I divorced at 34 and have a mortgage until I'm 74 years old with Yorkshire Building Society. As long as you have a pension / plan to accommodate the mortgage in retirement, you'll be fine.

You can typically borrow 4.5 times your income. Would definitely aim for a house in your shoes! Good luck!

newsgroupmonkey_

elsmandino said:

2. I realise that, at my age, mortgage lenders are going to slightly more wary of lending to me.  Say I go for a flat and need to borrow £150,000.00 - how do I calculate how long to borrow for?  Is this simply based upon the monthly amount that I can afford to pay per month or is it more complicated than this.

2 points here. Like you I separated a number of years ago, but I couldn't afford a place of my own, so rented for a number of years.

I got my "first" new mortgage at 49. My parents are just remortgaging at the moment. They're 74 and 79.
Frankly, the banks don't really care, as long as you have a decent amount in the property. Realistically, you're not going to be looking for more than 50% loan-to-value, even if you go for a house. You'll get decent rates, because the banks will see that whatever happens, they'll get their money back.

As for the amount to borrow, for an individual, they normally go 5:1. So if you want to borrow £150k, you're looking at £30k borrowing.

Personally, in your position, I'd be looking at a 20 year mortgage on a house. I wouldn't go anywhere near a flat - only my personal opinion. Downsides with a flat are leases (have a look through the first few pages of this forum and you'll find that leases are probably the biggest issue with purchasing), neighbours (you can have neighbours in a house, but they're one side or the other or both - not above and below too) and shared areas.

Also, consider other options. We found living in a village just outside the town much cheaper. And village life is much less stressy (we deliberately moved to a village this time)

Larac

When I divorced at 40 - I basically had to start again with a mortgage.  I worked on the basis that I would need to have a plan on reaching 60 and to either have paid the mortgage off or down size.  I am now that age and in the process of selling the house to buy something smaller as the children have now left.  Mortgage is now fairly small and lump sum out of the Pension will cover this.  

Albermarle

newsgroupmonkey_ said:

elsmandino said:

2. I realise that, at my age, mortgage lenders are going to slightly more wary of lending to me.  Say I go for a flat and need to borrow £150,000.00 - how do I calculate how long to borrow for?  Is this simply based upon the monthly amount that I can afford to pay per month or is it more complicated than this.

2 points here. Like you I separated a number of years ago, but I couldn't afford a place of my own, so rented for a number of years.

I got my "first" new mortgage at 49. My parents are just remortgaging at the moment. They're 74 and 79.
Frankly, the banks don't really care, as long as you have a decent amount in the property. Realistically, you're not going to be looking for more than 50% loan-to-value, even if you go for a house. You'll get decent rates, because the banks will see that whatever happens, they'll get their money back.

As for the amount to borrow, for an individual, they normally go 5:1. So if you want to borrow £150k, you're looking at £30k borrowing.

Personally, in your position, I'd be looking at a 20 year mortgage on a house. I wouldn't go anywhere near a flat - only my personal opinion. Downsides with a flat are leases (have a look through the first few pages of this forum and you'll find that leases are probably the biggest issue with purchasing), neighbours (you can have neighbours in a house, but they're one side or the other or both - not above and below too) and shared areas.

Also, consider other options. We found living in a village just outside the town much cheaper. And village life is much less stressy (we deliberately moved to a village this time)

That would very much depend on the local area. I can think of many places where living in a nice village instead of the local town would be more desirable/expensive.

elsmandino

Thanks for your input on this - much appreciated.

I agree that a flat is not worth it and I need to be looking at freehold property.

Given that I have never really been aware of property prices, before, I a pretty shocked buy just how high they are in the South East.  Two bedroom houses seem fairly unusual (where I am) but virtually everything seems to have a starting value of around £300,000.00 (you can go less than this but it seems to be for a very obvious reason such as dilapidation or distance from a station) and, even then, there are not as many properties as I may have expected.

I am not sure whether that is because people are simply not selling at the moment or whether I might have to accept that, with my budget, it is going to be slim pickings.

Bigphil1474

Agree with the majority - house not flat. We took out a mortgage last year after being mortgage free for a few years, and we're mid 50's. We took it out over 15 years to the age of 70, but plan to overpay to tie in with state retirement age.

I would recommend not maxing out affordability. We could have mortgaged for a lot more but wanted the payments not to stop us enjoying life. You might think 3 bedrooms is too much but if you have one and your son has one, that probably will leave a box room which makes a handy home office or ironing room, or junk room, not to mention visitors. There's 2 of us in a 4 bed semi at the minute and we use most of the house. 

N.B. - were you listed as an owner on the house you were living in? If so, you aren't a first time buyer anymore.

Good luck.

TroubledTarts

I wonder if renting for a little while might give you time to think and plan what you want and what you might want to do next.

A lot of times these things work out for the better and you have a chance to do what you want so don't rush into anything long term would be my advice.