First Time Buyer (Confused and in need of some guidance)

Librium

Hi all this is my first post so go easy on me,

Basically I've started looking for a mortgage to buy my first property. As you probably know there's a lot of information to take in and I'm just looking for a little bit of advice.

I'm a graduate and I'm currently on £17000 a year, I have a £30000 deposit I was wondering roughly how much I could expect to borrow?

I've only looked online so far and the Co operative quoted me £76500 and HSBC was £86000.

Are the online quotation systems very accurate? If not what's the best thing to do to get quotes phone/visit the branch/ see a broker?

Once I've settled on a mortgage do I have to sign up straight away? what if the cost of the property ends up being less than I've borrowed?

I know there's a lot of questions there but any advice would be appreciated

whu

Welcome to the site
I would suggest you find the property you want first before getting a mortgage so that you only borrow what you need to
Each bank/BS has its own lending criteria so best would be to speak to the respective mortgage depts to check exactly what you can borrow given your salary/deposit/and the loan to value of the property you want to buy so that you know how much you can get before looking for a property
Normally if there is an arrangement fee you will need to pay that up front to secure the mortgage

fluffysox

Hi when I got my first mortgage I tried internet comparisons and a local independant mortgage adviser but the best deal available to me was with my own bank. I had a graduate account so was able to get a 100% mortgage at 4 times my salary. However you have a great deposit to bargain with. Try typing in your details onto Moneysupermarket or other comparison sites, I tried this for £100000 house price based on your deposit and salary and lots came up including Abbey and Woolwich at good rates.
If you ring them they can give you more details (sometimes deals are withdrawn and still appear on web) and send out a "mortgage offer in principle" detailing how much they will lend you. But it is worth comparing the best deal you can find with whatever your bank offers recent graduates and checking independant financial advisors can't find you their best solution- they don't charge you and you've no obligation to go through them.
Compare all deals before committing yourself.

rozzy_2

When I took out my mortgage I went to a few banks/building societies to get an estimate of how much I could lend then looked at properties within that bracket. I used a local advisor in the end who got me the best deal.

Definately worth shopping round as previously stated different banks have different lending criteria. Dont let them give you a mortgage in principle unless your happy to use that particular company.

I ended up having a couple of agreements in principle which affected my credit score. This caused a couple of problems as the mortgage provider I finally used base their lending criteria on credit score.

Gambit

Hey guys,

I am thoroughly confused and since the site seems to be full of learned and experienced people I thought I'd ask for some help and advice on here.

I am looking to buy a flat in London with my girlfriend and we are both first time buyers. We have a combined income of £59500 and have been given an AIP saying we can afford a flat up to £250k.

What I am confused about how we should get a mortgage. We only got an AIP to help with the flat hunting and we made sure no credit check was done so it didnt affect us that way. But since we have started registering with estate agents in our interested areas we have had calls from their relative brokers (which I am guessing gets them a commission if we go with the broker) and that have all said they will beat my current rate.

What I dont understand about brokers is this. Why do some charge a fee if they are getting commission from the lender? Arent they just the middle man in the whole process or do they really get 'special rates'? Wouldnt it be better to go to the bank or building society direct after using comparison tables? As I was told by one broker that an application could take a few weeks but was told by my building society that it would be done within 5 working day for them including a valuation.

If anyone can help or give any advice I would be very grateful as its hard enough finding an affordable flat in London as it is without further complications with the financial side of things...

maninthestreet

£86000 is more than 5 times your salary of £17000. I would think long and hard before borrowing that amount of money - a 25 year repayment mortgage @6%p.a would cost £554 a month.

whu

Gambit wrote: »

Hey guys,

I am thoroughly confused and since the site seems to be full of learned and experienced people I thought I'd ask for some help and advice on here.

I am looking to buy a flat in London with my girlfriend and we are both first time buyers. We have a combined income of £59500 and have been given an AIP saying we can afford a flat up to £250k.

What I am confused about how we should get a mortgage. We only got an AIP to help with the flat hunting and we made sure no credit check was done so it didnt affect us that way. But since we have started registering with estate agents in our interested areas we have had calls from their relative brokers (which I am guessing gets them a commission if we go with the broker) and that have all said they will beat my current rate.

What I dont understand about brokers is this. Why do some charge a fee if they are getting commission from the lender? Arent they just the middle man in the whole process or do they really get 'special rates'? Wouldnt it be better to go to the bank or building society direct after using comparison tables? As I was told by one broker that an application could take a few weeks but was told by my building society that it would be done within 5 working day for them including a valuation.

If anyone can help or give any advice I would be very grateful as its hard enough finding an affordable flat in London as it is without further complications with the financial side of things...

Hi - some banks/BS dont give access to brokers for their mortgage products so it might be better to go to the banks/BS directly - I think HSBC might be in that category

Kez100

Gambit wrote: »

Hey guys,



I am looking to buy a flat in London with my girlfriend and we are both first time buyers. We have a combined income of £59500 and have been given an AIP saying we can afford a flat up to £250k.

An AIPis what you can borrow it is not what you can afford. Only your own cashflow budgets can tell you what you can afford (and I would advise you build in contingencies too as a home is for life not just for christmas).

herbiesjp

Which part of london are you looking at, and what kind of property are you looking at - as that could impact on what lenders are available to you.

If going direct to lenders you will need to know that you meet their criteria really.

That is where a broker is helpful - in knowing which lenders will and which will not be able to help based on your circumstances and current lender criteria.

Gambit

Thanks for the input guys.

Kez100 - Yeah, I know that we need to realise what we can actually afford so have made a budget with a bit of give in it in case we need to pay more for whatever reason. But this is why we are going to start off with a 2 or 3 year fixed rate so we will at least know what the payments will have to be for the first few years.

Herbiesjp - We are looking in the Wandsworth/Earlsfield area at the mo. I am starting to understand why a broker might be helpful but am worried about being seen as an easy target as I'm a first time buyer and that they will be pushing me towards a lender with a higher comission for them. So do different lenders have different criteria? ie. Just because we are told we would be lent a certain figure from one bank, that doesnt mean that we would necessarily be lent the same by another?

Librium

Gambit perhaps you should create your own thread instead of hijacking mine?

Thank you for everyone who posted a reply to my original message I'm going to phone up a few banks this week to get a detailed quote and then arrange to go in to see them and work out the details.

maninthestreet you're right it is a lot but it's just about affordable on my own and I'm going to rent out the other room once I find a place just to make things more comfortable. With the cost of Council Tax and Gas/Electric rising it seems like the best idea is to rent out a room and split the bills.

Thanks again.