1st time buyer - Confusion and Misery!!

stixmcvix

Hi there,

I'm 22 and looking to get a mortgage with my partner. Had some preliminary independent financial advice a few months ago, and he advised us that on our combined salary (£37,000), we could afford £105,000. Thing is, the house range we like is £110-£115,000. Don't really have much of a deposit, though we have £1000 saved up for solicitor's fees and what not. Can anyone advise of the specific costs involved so we can budget somehow, and also advise of the best sort of mortgage to go for? (All the mortgage lingo completely bamboozles me!!) And more importantly, is now the right time to buy?

Thanks
Vicky :j

meanmachine_2

Lenders like Northern Rock will lender you much more - around 4 times a joint income.

In fact, most lenders will give you what you're looking for.

That adviser clearly wasn't much help, unless you've got debts.

The lack of a deposit is also a big no-no.

My advice is for you to save up 5% of the mortgage then look again in a year or two.

Stretching on a 100% mortgage will leave with with a very poor mortgage rate.

And no, now is not a great time to buy, but house prices are only likely to fall significantly if int rates go up, which leaves someone like you in no better a position (as you're cash poor).

LouLouHelen

5% deposit, 1% stamp duty (for up to £250,000 purchase price) and solicitors costs which were about to £800 for us but worth shopping around.

I agree with MM - definitely better deals for those who have a 5% deposit and a bit safer as well if the property price drops.

Good luck, it will be worth it in the end!!

AmandaD_2

Hi Vicky,
We've just finished buying our first home and went through exactly the same as you guys. Have you both been with the same bank for a while? Because we have been and that REALLY helped! They looked at our accounts and realised we could afford to borrow a lot more than our salary's allowed. They also took everything into account and we got the mortgage we wanted.
You'll need a bit more than £1000 i'm afraid! Our solicitors fees, searches, land registry, stamp duty, bank transferals all came to £2342 and then we had our survey to pay for and we got a fixed rate, which was £399!! So get saving!!
Amanda x :rolleyes:

stixmcvix

Thanks for all your advice, guys. My partner and I both bank with HSBC and have done for at least 3 years each. We can't afford any property above £120,000, so thankfully we can knock £1,200 off Amanda's total amount because of stamp duty. So would I be right in thinking that £1500 would be enough to pay for solicitors, surveys and whatnot?

Worst thing is, there is just no way we can afford to save up a 5% deposit and be in a position to buy anytime soon (5% been roughly £6k), we've found it hard enough already to save up the £1k we've got in the kitty. So on that note, has anyone got experience of 100% mortgages, and if so what is your view on them?

meanmachine_2

I'm afraid if you can't afford to save, then you are unlikely to have any leeway should interest rates rise.

Remember, they're still incredibly low at the moment, regardless of where they go next.

What rent do you pay? And how does that compare to a repayment mortgage?

Check out the links to the mortgage checkers on this page. Fill in your details and they'll throw up some lenders for you.

But again, I'd suggest you wait a year, and save up that 6K. It'll be good discipline - having to stick to a budget etc

davepugh1981

I believe Nationwide will offer you significantly more than 105k as my partner and I have similar salaries to you and your other half and can get a much bigger mortgage. round 150k i think

Gareth81_2

It's well worth speaking to MSE forum user 'herbiesjp' (you can contact him through the forum) he is helping myself and my partner with a mortgage at the moment and we are in a very similar position to you. He responds really quickly and is really keen to help with sensible advice.