buying without a deposit...please help!

dboswell

Hello, I am a graduate from 2002 and currently work in marketing.

I am spending about £400 pcm on rent. I would prefer to have a more stability and start to build for the future by buying my own place.

I calculated that I could save £400pcm that I currently pay on rent plus rent out a room for £400 pcm.

My only problem is raising a sufficient deposit.

Are there any mortgages out there for people with insufficient deposit or are there other ways that I can purchase without a deposit?

thanks

Woby_Tide

depending on your earnings get a 100% mortgage or borrow the deposit if you can get a decent 0% credit card for example. that said not sure I understand how you can save th £400pcm you pay on rent, regardless of renting out a room you'll still have a mortgage to pay which is more than likely to be the cost of your rent(much higher in fairness or eberyone would buy a 2 bed and rent out the second bed)

dboswell

thanks for reply.

the rent I save would go to pay the mortgage interest plus any rent I then get from letting a room out.

meanmachine_2

I think the OP believes that, by only having an interest only mortgage, they somehow own the house.

Sorry to burst the OPs bubble, but if you have an IO mortgage, all you're doing is renting off the bank.

Compare a repayment mortgage to renting and see how the figures stack up.

In the days when house prices were rising, IO mortgages made some sense, but not at the moment, or for the foreseeable future.

And to be honest, 400 in rent seems tiny to me, so you should be able to save up for a deposit.

100% mortgages don't offer competitive rates, and I would bet any money that, in six months' time you'll be in negative equity.

That'll certainly give you "stability" - you'll be house trapped!

Robert_Sterling_3

With an interest only mortgage you do own the house but your debt is not decreasing and as well as having a mortgage you have to have another arrangement for paying off the mortgage in due course so perhaps you might as well have a repayment mortgage in the first place.

Joe_Bloggs

When you get a mortgage you 'rent' the capital off the bank. The repayment aspect puts a finite limit on the period of this 'rental' period but adds to the cost. The only thing you own on a mortgaged property is the difference between the current selling price of the property and the balance of the mortgage.
J_B.

dboswell

for those above who plain dont understand (meanmachine) 1) you do own the house...you have title and the perogative to do things you cant while renting and 2)get your speculative blindfold off.....some of us want to buy a home! you seem to think everyone wants to buy now and sell in 6 months....well not everyone does

Joe_Bloggs

@dboswell and all.
There is no need to flame out on meanmachine as you are both in the same boat. Those with property are caught in the same speculative marketplace as those without. Those 'with' could be in for a rough ride.
My last mortgage terms and conditions reserved the right to give me three months to pay up the mortgage at any time! They reserved the right to inspect the property and to undertake repairs and send me the bill. If they want to evict me for non payment they reserve the right to sell of the contents after eviction. How can this be considred ownership ? You have to have savings to be able to afford to borrow on a mortgage and to pick the best deals. You need money in reserve to change lenders when it makes financial sense and cope with emergencies/repairs etc.

The average age of a first time buyer is 34. I'm sure I made up that statistic up but it keeps getting quoted. Your savings are holding you back. Perhaps your salary or expenditure are hindering your savings. Give yourself time to save up and progress along the career earnings and savings ladder.

J_B.

dboswell

im sure meanmachine can answer. I have read many posts from meanmachine and he has an agenda which makes most of his postings less than objective. his agenda is to talk down the market. isnt that right...so its less than balanaced.

in addition, his post is completely irrelevant to my OP and add nothing to my OP. I was asking on a deposit theme.

there seems a distinct inability to separate out speculation with homebuying. why? if someone wants to buy a home, why do you think its "speculation"? I and many people dont care what prices are today, tomorrow, next week or year. There are people out there that want to buy because they want a home.

joe bloggs...did your mortgage tobs state you needed written request to decorate? change the bathroom or kitchen? recarpet? apply for a driveway?

meanmachine_2

I'm sorry my advice seemed irrelevant.

Maybe it just wasnt' the advice you wanted to hear.

Perhaps if you list details such as the purchase price of the property you have your eye on, the deposit you're putting down, the rentable value of any room you wish to let out, that might help me see how and if your figures stack up.

And I have no vested interested in anything. I don't own, but would like to. How does that make me any less objective than anyone else on here?

I'm in exactly the same position as you mate. If you wish to ignore my advice in favour of someone who works in the property industry, that's your look out.

You might think renting is dead money, but also remember you'll be paying stamp duty, legal fees, and maintenance costs which you don't have now.

How will you pay for those when you can't even put down a deposit?

theGrinch

you could consider a mortgage greater than 100% if you have reason to believe your income will rise i.e. graduate professional, look for developer schemes for FTBs, saving a deposit, borrowing, clubbing together with meanmachine even!

I knew someone in a similar position. he was going to part own with a friend but in the end took a new builder scheme with stamp duty, legals, F&Fs, survey and deposit paid.