First Time Buyers - Just have a look at my plan please : )

scottp_2

Hi,

I have just started a new job (well, just got it and start in 3 weeks) and my girlfriend is a nurse and has been for around 4 months (that is how long she has been getting a decent wage).
I am 18 and my girlfriend will be turning 17 in 2 weeks. Between us we will be getting around £2000 per month after tax. From this we plan to save £1000 (£500 each into Barclays Tax Beater ISA until full, and then the rest into high interest such as Kaupthing). I also already have £2500 saved in an YBS ISA (I had a lot more but wanted a nicer car and this will be moved to IceSave). The remaining £1000 will go on monthly spends such as car fuel (costs me a fortune at the minute!), board to our parents (£100 each PM) and then going and enjoying ourselves (we are only young you know, lol). I estimate that necessary spends are only about £400, so there is room to save even more if needed.
We are looking to buy a house in our area next year, prices for a 2/3 Bed with Garage and decent parking are around £115,000. For example, a Barrats Premier 2 bed in one of the nicest villages in our area was up for £130,000 , but I managed to get her to £115,000 with 5% Deposit paid (I would never just use this as a deposit though, seems a good way to get another few quid off!). In another village, which is nice but more up and coming than established, they are going for £115,000 for 3 Bed with garage, however the woman wasn't interested when I told her I was looking for next year!
Just for a little more info, I will be on around £19,000 next year plus bonuses and my girlfriend should be on around £16,000, I should have a perfect credit history (£4000 O/D but used once for 2 days whilst waiting for savings transfer, CC for nearly a year with a limit of £1600, paid in full and a mobile phone with no missed payments) but at the time we want to move in, my GF will only have been 18 for a few months, will this cause many problems? Both of our jobs are very secure I would say.

Does my plan sound good? Any ideas/suggestions will be great; I just want a little assurance. I want to be in a position that when the market sorts itself out I can jump in and not miss my chance.

Thanks a lot and sorry for the autobiography!

hostertlady

blimey scott, i am not qualified to advise you but well done on your forward planning.. at 18 you sound very grown up and motivated.. good for you x

maninthestreet

How accurate is your figure of £2000 per month take-home pay? What is your starting salary in your job, and what is your GF's current gross income? At the age of 18 you will have a short credit history.

ohmochraich

Is your g/f a HCA (health care assistant) or a student nurse - because if shes just turned 17 she definately isnt a nurse (as they dont START training until they are 17 so wont qualify until 20). There is a huge difference in income between all 3 - ranging from under £7,000 for as a student, to approx 12.000 for a HCA up to £20,00 approx for a qualified nurse.:A
Is she a care home assistant? - cos im not sure where your figure of £16,000 comes from but its unusual for care homes to take on a 16 yr old so your g/f is very lucky.

FrankButlar

Definitely can't emphasis how important your credit history is here, I just got turned down a mortgage because of a low credit score. I make enough money, but I have a low score.

Best of luck on your application, sounds like you have it well planned out!

bankersmug

Also make sure you're on the electoral roll - very important when they run credit checks etc.
Well done for being so savvy at the age of 18 - wish I'd been like that when I was 18.

scottp_2

maninthestreet - The figure is about right, I will be on just short of £17,000 plus yearly bonus to start with, and once I have completed the management training (around 6 months) it should go up around 10% plus inflation increase in April. To my calculations that is around £1100 per month, sound right?

ohmochraich - Sorry, I didn't really make it clear what she does. She is an Auxiliary on the Bank system, but has got a full time contract on a department, so gets a regular wage every month (around £850 after tax), but can also do extra hours if she wants to. However, next year she will be a HCA, which has a starting salary of around £16,000 at the minute. She was one of only 3 taken on at the hospital straight from school which is why she is on a good wage; she worked very hard at school and in St John Ambulance to get into this position. She plans to stay on as a HCA for a few years (She loves everything about the job at the minute) and then is going to study to be a nurse in a few years.


FrankButlar - Yeah I know that is going to be an issue. I have a credit card that I have had since I was 18, I pay the full balance off it every month and always well before the due date (got a D/D set up for it) which should improve my score.

bankersmug - Hopefully that will be okay, I know I am definitely on it, and my GF comes up Subject & Family or Associate, which is the same as mine but she is not 18 yet, not sure if that makes a difference.

Thanks a lot for all the tips and encouragement!

neas

sounds a plan, i'd extend your plan to 2 years though, because house prices will have bottomed out more by then.. 1 year houses will be sliding stil li believe...also waiting another year you will have had plenty of time to develop with her and have saved more deposit.. in your current situation its a win win waiting a bit extra as board is cheap :P

youngmoney_2

Excellent work on your finances so far Scott, you're doing absolutely the right thing and the fact that you have two incomes coming in at relatively young ages is a big plus (I moved to London and set up by myself at 17 so speaking from experience!). You'll have a lot of jealous people! .

I'll just re-iterate what everybody else above me has said, your credit profile is going to be the biggest thing to focus on. Get on the electoral role, spend on your credit cards every month and pay it off, try to stay at the same address for a long period of time.

The only difficulty you might have if your girlfriend is only just 18 when you buy is going to be her credit rating. It's important she builds up a credit profile as well.

Other than that mate, you're in a great position to be very successful.

pollyanna24

Just thought I would add my tuppence.

You sound just like I was when I was around your age.

When I met my bf at 17, we started saving pretty much straightaway (after the important first year of going on three holidays of course!). Our wages were pretty similar to yours, but prices were higher for us as we are close to London.

By the time we were 21, we had saved £12,000 towards our house by doing the same as you. We both lived with my mum and dad and gave them £200 for our board. We bought in Luton (London prices way too much and the area in Luton was pretty cruddy) for £110,000 in 2003.

If I were you though, I would hang on a bit. You don't need to own a house so young. Give yourselves till you are 21 at least. Of course you don't think you are going to split up, but it's a biggggg committment to make (more so than marrying her, I reckon!). Plus, there is so much fear in the housing market at the moment. They'll come down, don't really see how they can't.

I know everyone will say that we bought when house prices were still on the up, but we only sold our first house for £20K more than we bought it. We could have saved this amount in the 2 years we owned it. If we were to do it now, I reckon we would be losing that £20k and would be better off staying out of the housing market and saving that £20K. Granted, we were lucky.

Keep saving, saving, saving and just think how big your deposit will be in 2-3 years time!

LillyJ

I thought I would add, that I used to be a bank auxillary as well, when I was studying, and so alot of my friends are HCAs.

Nearly all of them who were my age (I am now 23) have either done or are doing their nurse training. If they do the degree course rather than the diploma she will take a REALLY substantial pay cut, she will just be on a bursary, slightly more for the diploma. But obviously in the long term this will help her earnings potential alot. So just make sure you can cover the repayments alone if she does start her training.

Me and my partner have been together since we were 16 and are buying at the moment, so don't let people tell you you are too young to be in a serious relationship. It might be a plan to rent for a year if you aren't sure how it would be living together, as we learnt alot about each other when we started renting even though we had been together 4 years at that point! But I know you can save more staying at your parents so if you think that is best then that's what you must do!

Good luck with it all, and don't forget to save for things like solicitors fees (we were shocked when we found out the cost of moving!) but it looks like you are going to get something without stamp duty so you will save there.

Make sure you have fun though while you can, it is the cheapest time of your life when you live with parents, I would move back in with them if I could! (but they live 100 miles away!)