First Time Buyer

mavis_muriel

My son at 20 years old is looking to invest in his first property, he has just came out of 'his time' and is now earning £41,000 per year.

The down fall is that unlike his mother, he has no ability to save and is hopeless with money. I know it is a mine field out there in relation to mortgages, but there must be basic rules of does and donts.

Are 100% mortgages available? Are they an option or a now go area?. I have very little knowledge of mortgaging and I just dont know where to start to point him in the right direction. I've tried to read up on Lewis's help's and tips but I hold my hand up, I'm struggling to get to grips with it all. Too much info. Can anyone advise please.

meanmachine_2

Wow, your son is only 20 but earns £40K!!! Where does he work, the city?

You need to tell your boy that, for him to get his own place, he'll need to save a tiny amount of that huuuuge salary, and put down a 5% deposit.

Otherwise he'll be paying over the odds in interest.

Maybe that'll help instill the saving instinct into him.

He's clearly bright, so he should be able to put 2 + 2 together.

mavis_muriel

He works off shore. I know what you say makes sense but he's living for today not tomorrow. Too much money too quicly for my liking though it is a hard and rough job.

meanmachine_2

Sure, but buying a property isn't a "live for today" activity. It's a declaration to your lender that you're going to be a sensible boy for the next 25 years.

It's more of a commitment that marriage!
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Check out the best buyers on the moneysupermarket link. You'll see that the best deals have an LTV of 95% max (requiring at least a 5% deposit)

rchddap1

Its also not just the deposit, but the legal fees, stamp duty...and the all important spending money for furniture and a bit of alcohol for the moving in party.

mavis_muriel

I laughed out loud, I'm afraid it's a case of I'm moving and he cant follow so he's having to find a place of his own. Sorry I put his age as 20, he's now 21 past May. It's just so frustrating seeing how much money is running through his fingers. He can manage bills okay it's just he can't save. When do you get a solisitor involved? How much roughly are their fees. Does he require a survey on a 'new build'. So many questions! Where do you start?

rchddap1

What's the time frame? I'm in a Shared Ownership Scheme and that took 2 or 3 months before I could physically move in. Survey's are always needed...its so the mortgage company know that that the property's stated value is its actual value.

Solicitor gets involved once you've made an offer and paperwork is needed to move to the completion of the purchase.

Has he had any credit in the past? That is, does he have a credit card, any loans, is he on the electoral roll? All of this matters when trying to get a mortgage. No credit history = harder to get a mortgage. Not on the electoral roll = no proof of where that person actually lives and so a lower credit score.

mavis_muriel

Soon as he was 18 I got him to take out a credit card for the very reason of getting a credit history, I'll be doing the same with my daughter in October. He also has a car loan and I made sure he was on the voters roll. There's no great urgency for to move but I feel he needs to get things moving now. It's my own fault, I've done everthing for him. Look at me now, researching this stuff when it should be him, but hey, I'm a mum, I cant help myself.

rchddap1

One thing with new properties. Always be careful of 'snags'...ie, the bits on the house that hasn't been quite done right and needs fixing. You also can't decorate for the first year whilst the house has a chance to settle. Also look very closely for ease of parking around the new house. Parts of our estate are like the dodgems with cars parked everywhere. Our little bit though has allocated parking and so we are slightly more 'organised' that other bits of the estate.

If he really wants to buy a new house then I would suggest that he take a look round a house on a new estate. They should be able to fill you both in on what you will need.

If then he starts to think about renting...remind him that most landlords will want a good sized deposit in advance. Either way he will need some savings if he's going to move out.

rchddap1

One though...if he has trouble saving...set up a direct debit from his main wage account to a savings account on or around the day his pay goes in. That way he won't see the money and so will be more likely to be able to save it. I also try to think of my savings as a 'bill' and something that has to be done.

meanmachine_2

Personally I'd stop worrying and let him think for himself.

If he really wants to move, or find a place, then he'll have to learn how...like the rest of us.

If my mum was prepared to do everything for me, I'd probably be as clueless as him.

Sounds to me like he'd be better off renting for a short while, just so that he can get used to how much things really cost and is forced to be more organised. Then, maybe in a year's time he can look to buy.