First Time Buyers & Saving for deposit

ELtoroloco

Hi, I’m sorry this has probably been asked many times before so I do apologise in advance. 

I’m looking for some advice on mine and  my girlfriend’s current situation.

We are wanting to start saving for a deposit for a house (currently renting) but we just don’t know where to put it? I’m thinking Money Box’s Life Time ISA so we can get the government’s top up if we put £4000 in we get £1000 top up is this correct? 

Also I’m 35 (36 next year) and my partner is 34 and in my head I’m thinking of a 5 year plan which would work out at £20,000 but I will be 40 by then would this hinder my chances of getting a mortgage? 

Any advice would be welcome thank you

Myci85

Your age will impact the length of mortgage you can take out, and therefore possibly the monthly affordability. But 40 isn't too old to get a mortgage. Me and my partner were FTB last year, partner aged 42. We managed to borrow on a 33 year term as lender satisfied we both had pensions etc.

Albermarle

If you are reasonably sure you will be buying a house in 5 years time, then it makes sense for you both to open Lifetime ISAs and put the maximum £4K each per tax year unto them.
You can not open a joint one, in case that is what you were thinking.

The mortgage company will be less concerned about your ages, than whether you can afford the monthly payments. So maximising your income in the next 5 years would be useful. Being in your mid 30's is a prime time to get promoted/move jobs/retrain if necessary.

Jemma01

We share the same understanding about LISA re the extra 1k per 4k every year. If you can afford extra savings past the 4k each, then high interest accounts are an additional way.

I also strongly concur with @Albermarle about promotions, finding a higher paying job (I find that way better than promotions when it comes to pay rise, you'd never spot me in the same company more than 2.5yrs), retraining and getting appropriate certs that your industry recognises. (That's for both of you).

I bought my house last year at 39, I chose 20 years just because 🤔 but I think the max was 28 on the HSBC mortgage form. The mortgage lenders are interested in your affordability and job stability and things that could affect your ability to pay.

saajan_12

ELtoroloco said:

Hi, I’m sorry this has probably been asked many times before so I do apologise in advance. 

I’m looking for some advice on mine and  my girlfriend’s current situation.

We are wanting to start saving for a deposit for a house (currently renting) but we just don’t know where to put it? I’m thinking Money Box’s Life Time ISA so we can get the government’s top up if we put £4000 in we get £1000 top up is this correct? 

Also I’m 35 (36 next year) and my partner is 34 and in my head I’m thinking of a 5 year plan which would work out at £20,000 but I will be 40 by then would this hinder my chances of getting a mortgage? 

Any advice would be welcome thank you

What sort of value do you think you might be going for? Although no one knows the rules in 5 years time, currently there's a limit on the property value you can buy with a LISA. If you want to buy a more expensive property or need the money for something else, then there's a penalty to withdraw the LISA money, which would be £1250 on the £5000, ie you lose a little more than the bonus. 

monkey-fingers

Jemma01 said:

I also strongly concur with @Albermarle about promotions, finding a higher paying job (I find that way better than promotions when it comes to pay rise, you'd never spot me in the same company more than 2.5yrs), retraining and getting appropriate certs that your industry recognises. (That's for both of you).

I wouldn't say at 39 having changed your jobs every 2.5 years that it was "stable".
As a Manager, there would be some red flags there if I were interviewing you.

ELtoroloco said:

Also I’m 35 (36 next year) and my partner is 34 and in my head I’m thinking of a 5 year plan which would work out at £20,000 but I will be 40 by then would this hinder my chances of getting a mortgage? 

I got back on the Mortgage wagon a few years back at 49. Effectively, I was a FTB as far as mortgage companies were concerned.

If you can prove affordability, you can often get a mortgage to finish at 75 or beyond. 

EssexHebridean

Are you in a part of the country where you can be absolutely confident that you will be buying below the £450k limit? If so then a LISA is a no-brainer because of the bonus, if there isn't that certainty though, less so as currently nobody knows whether that limit will be increased, or if in fact a new product with different parameters will be introduced.