Advice for a first time buyer - making an offer

adamzetec

Right, thanks for the replies.

First of all, i'm not rushing into the purchase. I have spent months following rightmove etc but only recently got my mortgage agreed due to my pay rise. When I say I have started looking, this is more to do with physically looking around houses as I didn't want to waste anyones time before. Now I have my mortgage agreed, I am in the position to buy should one meet my criteria.

My numbers do add up. £185k total minus a 10% deposit (£18k'ish), 35 years at an interest rate of 5.83% with the Abbey. This leaves me with a mortgage of £166.5k and monthly repayments of £908. This is not interest only.

moneysavinmonkey

adamzetec wrote: »

..... I only started looking on Wednesday when I met with a mortgage advisor who has offered me £185k.....

At £185k, i'd be looking at payments of £938 per month. This is with the abbey at a 5 year fixed rate of 5.83%.

Hi from your first post (excerpts above) I understood that the mortgage was for £185k = payments of £938 (your numbers) and you had only just started looking.

But now you say that you have been looking ages and the mortgage is £166.5k
even at at 35 years though I make that £924.... now you say £908.. perhaps this is a typing error but it makes your story seem suspect to me.

Bear in mind by extending the term of your mortgage to 35 years you will pay a whopping £222.9k in INTEREST ALONE over the term of the mortgage
:eek: (equal to £530pm rent for 35 years!)

a more standard 20 year term would cost you 115,881.60 in interest.

sammyjammy

adamzetec wrote: »

Right, thanks for the replies.

First of all, i'm not rushing into the purchase. I have spent months following rightmove etc but only recently got my mortgage agreed due to my pay rise. When I say I have started looking, this is more to do with physically looking around houses as I didn't want to waste anyones time before. Now I have my mortgage agreed, I am in the position to buy should one meet my criteria.

My numbers do add up. £185k total minus a 10% deposit (£18k'ish), 35 years at an interest rate of 5.83% with the Abbey. This leaves me with a mortgage of £166.5k and monthly repayments of £908. This is not interest only.

Ignoring the fact that you're buying at the top of the market I myself bought the first house I looked at, I hadn't even done the research that you've done. I'm still there 9yrs later, if it feels right and your planning on staying put for a while then it probably is. Have you done a realistic Statement of affairs showing all your costs and outgoings now and adding in what you think the house costs might be? Always over estimate, if then it still looks affordable then go for it. My mortgage including overpayments is about 52% of my take home pay but I really don't have much of a life and my transport costs are really low, does your girlfriend live with you? Will she be contributing to the household? Will her name be on the mortgage?

I also had two lodgers when i first bought my house but despite having shared a house with them before it was really different when it was my own home and they moved out by mutual agreement after six months - that was really tough but I can honestly say I would rather sell up than have to share my house with lodgers again!!

carolt

I can't say strongly enough that I'd advise you not to buy at that price/those earnings right now - I think it sounds like a big mistake.

Good luck with whatever you decide, though - if you take the buying option, I'll think you'll need it....

mariagti

I just want to say well done!:T :T :T :T :T :T :T

You have got your head screwed on, others your age would be wasting all there money down the pubs etc. What a great wage to have also at that age and 18k deposit.

I dont know much about mortgages and interest so cant comment on that.Nearly £1000 mortgage a month sounds scary!

adamzetec

Sorry for the lack of updates, have been very busy at work (amongst other things!).

So an update, unfortunately someone else made an offer on the house which was accepted. Hasn't been anything else this week so I didn't look at anymore over the weekend. On many mailing lists so i'm sure something will come up soon!

adamzetec

House is back on the market.... at exactly the same price as before (£185k) :mad:. The chain has fallen through for the person who made the offer previously so it's going back on the market this afternoon.

However, my mortgage has also risen from 5.84% to 6.01% and the arrangement fee has also gone up by £500. This means an increase in monthly payments by around £30 which pushes it out of my price range without a doubt. To get the rate to around £900 before i'd be needing £5k knocked off bringing it to £175k.

Speaking to the estate agent it seems as if the previous offer which was accepted was greater than £180k. With everything going on and the massive discounts I seem to read about on here I am very suprised at that. The estate agent basically said i'd be wasting my time as they wouldn't drop below £180k. Frustrating as the house has falled through twice and remains empty as the vendors have emigrated!

The hunt continues I suppose unless the agent gets back to me suggesting the vendor will take a lot less.

beecher

I think the fact that an extra £30 on your payments makes it unaffordable says it all - you should be allowing for a lot more than an increase of 0.17%!!! What if interest rates increased significantly? Inflation is on the up and will become the BoE's priority. Your numbers seriously do not add up, and I'd strongly recommend you saving up some money and not buying in the near future.

carolt

The right place at the right price will come through for your eventually. In any market, places fall through; no point getting too hung up about it.

You may be glad you didn't get this house if (a) prices fall, or (b) you find a much better house.

(a) is looking increasingly likely by the minute, and (b) has a funny habit of happening, as many homeowners on here have attested.

Certainly, we lost out on a house we were trying to buy just over a year ago, and I'm now very relieved; I think it would if not have financially crippled us, certainly made us very vulnerable to any downturns in the market.

Good things come to those who wait.....

adamzetec

beecher wrote: »

I think the fact that an extra £30 on your payments makes it unaffordable says it all - you should be allowing for a lot more than an increase of 0.17%!!! What if interest rates increased significantly? Inflation is on the up and will become the BoE's priority. Your numbers seriously do not add up, and I'd strongly recommend you saving up some money and not buying in the near future.

Sorry? My numbers do not add up? Please elaborate....

Well, i'm looking to keep my payments around £900 to protect myself for the future and this is the maximum I would consider spending on a mortgage given my current financial situation.