Wedding, Deposits and First Time Buying.

Eyes_Without_a_Face

I hope this isn't a totally ridiculous question but...

We are getting married in August 2009. I would also like to buy a house in that year.

I think by then a conservative estimate of our savings would be, in total, £15k. I would like to use this as a deposit for a house and to pay for our wedding. But weddings are expensive does and I know this site is about money saving hut we do want a reasonably big wedding. I think with a we'd be looking at 12k minus a Honeymoon and 15k with. Therein lies the problem. That leaves zero deposit.
We are currently living with my parent and I do not want to start married life there.

Please do not think I am a total idiot. I do realise you cannot have everything all of the time. Infact, I am sensible with money and have a very good credit rating and history.

With 18 months until we Wed obviously things can be changed, corners cut etc but I think there is still time to look as other funding options.

First off we could save harder, but the reality is we do want some type of life.

Secondly we could not have a honeymoon and reduce number etc - a definite possibility.

Thirdly we could get a loan - out of the question really. I am not a major fan of debt and avoid it where possible.

Now to the actually question

In a minute anyway...
Obviously having never had a mortgage before I do not know how they work and credit seems to have changed drastically since my Dad bought our house,. Also I do not like dealing with people when I have no knowledge of the subject. I like to be prepared.

The question, how, if at all, can I use my savings...

We are looking at property worth 135K

Route 1
Using our savings 10k for wedding leaves 5k for a deposit.

Using moneysupermarket as a guide...

mortgage value 130k, deposit 5k over 25 years = average repayments of £860-920

Route 2 - house same value 135k

mortgage value 135k, deposit 15k over 25 years = average repayments of £845-880


My question is route 2 seems ideal. This route would use our deposit to get us a lower interest rate. it would cover the cost of the property and leave us with 15K for getting married. Would this be actually be allowed to happen. This is were I feel so naive and stupid. I have had loans before and obviously it is payed into your bank. I know mortgages dont work like that but does the deposit get moved or would lenders not lend that much based on the property value?

vanilla8

Im in a similar situation, so just wanted to say you are not alone!
Although i qualify as a key worker, so i am going through housingoptions.co.uk to buy a home on the open market homebuy scheme. We do not have any money saved for a deposit, only 5-6k for the solicitors fees, stamp duty etc.
You may want to consider these fees in your calculations.

I am getting married in september 2009 - we are doing it abroad to save money.

Good luck, i hope you find the best solution!

darkcloudi

I got married and bought a house last year. Was quite a bit of a challenge as I was required to do some work to the house which worked out at additional costs.

My deposit which was similar amount to yours I decided to go with the larger deposit as without it I would have had to pay a larger product fee and a higher interest rate. So you should also look into this.

Some of my wedding cost was paid with 0% credit cards and family friends borrowed me some money which I am currently paying now. This may be one way of financing your wedding if you can ensure you can afford the minimum amount a month.

C8LNJ

Hmmm its going to be tough to do all that at once on your budget, typically as a minimum your looking at 5% deposit on a house & then stamp duty, the fees & anything else that goes in hand with buying a house. Would it not be possible to get a mortgage sooner, even a smaller one get settled in that then focus on the wedding? I know I wouldnt like to jump into all that at once. Me & my girl are looking to live together before anything like marriage or an engagement is even considered.

lyric_grace

Hi all,
I'm in a similar position as above! We bought our house in sept 06 and used our money for deposit, we are getting married in 15 weeks and most of the cost is goig on a 0% card for 12 months as this for us worked out the best as lower fee and repayment rate etc. We ourselves hate debt but as its 0% we just had to do it and make sure we repay it which we will! Good luck with it all! LGx

dreamalittle

Eyes_Without_a_Face wrote: »

My question is route 2 seems ideal. This route would use our deposit to get us a lower interest rate. it would cover the cost of the property and leave us with 15K for getting married. Would this be actually be allowed to happen. This is were I feel so naive and stupid. I have had loans before and obviously it is payed into your bank. I know mortgages dont work like that but does the deposit get moved or would lenders not lend that much based on the property value?

I think you're confused somewhere here. The 15k needs to be paid to the vendor when you buy the house, with the bank stumping up the other 120k. So the payments are lower with a 15k deposit because you're only borrowing 120k instead of 130k.

You can't have your 15k and er, eat it.

Money4uMortgages

It all seems to happen at once, doesn't it?

A couple of things you need to take into account in your calculations. First of all, you will need a £2-3K for your fees. You will have stamp duty, solicitors fees, survey, arrangement fee/booking fee (although this last one can often be added to the loan if suitable). This will reduce the amount that you can use for a deposit.

When trying to determine the amount of deposit, there are certain thresholds that will ensure better rates and fees. Generally, these are 0%, 5%, 10% and sometimes 25% deposits. If you are just shy of one of these, you may want to try come up with a bit more to get you over the hurdle for a better rate.

Hope this helps.

Eyes_Without_a_Face

Thanks everyone. I have looked into this a bit more and have refined my question. I think what I wanted to know is will a borrower lend you more than the value of the property you are after and will your deposit secure a lower rate.

I did calculate some fees in. c£2000 from a different pot of money, so thanks for the warnings anyway. Though maybe 2k isnt enough.

I am a graduate and a professional. I think I am a professional anyway. Teachers tend to say they are a profession though I am not sure banks will see it that way? Anyway I have found this product from Scottish Widow which looks exactly like what I am after/ trying to describe.

http://www.scottishwidows.co.uk/bank/mortgages/grad_additional_mortgage_borrowing.html

What do you think about this?