1st time buyer solo

bones85 · 7 September 2017 at 9:33PM

Hey there, so i'm 31 still live with my parents and i want to buy my own property, I've done a savings scheme with work which matures in february where i will receive my savings of £10,600 or the option to buy shares (tesco) at the option price of £1.50 each, so base on £1.80 share price i'll have £4,000 profit on them!

So say £14,000, that isn't going to be enough for a mortgage? i was looking at 2 bedroom houses, say max £130,00 but i think that's pushing it! i'm on roughly £20k a year in work

but i can't bare to stay at home another 12 months and renting i think is just wasted money!

Also i have been told even though the MSE credit check says i have a good credit rating, it might be worth getting a credit card and paying it off just to improve my credit rating?

worried_jim · 7 September 2017 at 9:37PM

Just find yourself a whole of market mortgage broker and take it from there.

Good news with the shares!

AnotherJoe · 7 September 2017 at 9:49PM

If you don't have a credit card you should get one, use it and pay it off each month. That will help establish a record.

steampowered · 8 September 2017 at 1:57PM

According to London & Country's mortgage calculator (https://www.landc.co.uk/calculators/), on a salary of £20,000 you could borrow £100,000. It is a good idea to speak to them.

With a £14,000 deposit that takes you to £114,000. You'll need to budget for moving costs and conveyancing costs too.

It sounds like you are in the right ballpark although £130,000 may be slightly out of your price range.

black_wings · 8 September 2017 at 2:35PM

Don't take this badly but a purchase price of 130k sounds unrealistic for your salary. You need to save up a larger deposit, improve your salary, or find a partner to purchase with. Even at x4.5 that only gives 90k of lending. On that salary I personally wouldn't be comfortable lending that much but I guess others might be.

If you are that unhappy at home why not move out and rent, even if you are renting for 5 years, it is not the end of the world and not completely dead money because at least you have the enjoyment of having your own space and privacy and your parents can have their well deserved space too.
If you at least have your own space then you will not be in such a massive rush to buy.
You don't know what the future will bring; maybe in a few years of renting you will meet someone, pool your funds together and you will find that 2 salaries massively increases your lending power.

Don't forget - you'll need like 2k for fees, money to buy furniture, appliances and necessities, money to deal with any unknown issues in the house when you first move in. Plus an emergency fund for anything else that comes up. That 10k soon disappears.

Open a Help to Buy ISA or Lifetime ISA urgently if you haven't already.

FitzWilliams · 8 September 2017 at 2:51PM

Buy a new build. You should be eligible for an equity loan of 20% of the purchase price. That should almost get you to your 130 mark.

ACG · 8 September 2017 at 3:19PM

FitzWilliams wrote: »

Buy a new build. You should be eligible for an equity loan of 20% of the purchase price. That should almost get you to your 130 mark.

But the equity loan will then affect affordability I think.

ACG · 8 September 2017 at 3:23PM

If you can get some of your deposit in a Help to buy savings account, that will give you a bit of a boost, but not a massive one.

If it helps, my first home cost me £84k. It needed work doing to it, but I could do that work in my own time when I had the money. The property itself at the time was worth about £125k had it been up to scratch. I spent about £11k doing the work (new kitchen, bathroom, rewire, boiler, decorating). So I then had a £125k home for £95k. As it happens, by the time I had done the property up it was then valued at £155k (I sold it earlier this year).

The point I am trying to make is, try to find the ugly ducking property and build the value in to it. That will then get you out of the home, keep your repayments down and allow you to build equity in to the property to find something more expensive if you wish.

bones85 · 18 September 2017 at 3:32AM

black_wings wrote: »

Don't take this badly but a purchase price of 130k sounds unrealistic for your salary. You need to save up a larger deposit, improve your salary, or find a partner to purchase with. Even at x4.5 that only gives 90k of lending. On that salary I personally wouldn't be comfortable lending that much but I guess others might be.

If you are that unhappy at home why not move out and rent, even if you are renting for 5 years, it is not the end of the world and not completely dead money because at least you have the enjoyment of having your own space and privacy and your parents can have their well deserved space too.
If you at least have your own space then you will not be in such a massive rush to buy.
You don't know what the future will bring; maybe in a few years of renting you will meet someone, pool your funds together and you will find that 2 salaries massively increases your lending power.

Don't forget - you'll need like 2k for fees, money to buy furniture, appliances and necessities, money to deal with any unknown issues in the house when you first move in. Plus an emergency fund for anything else that comes up. That 10k soon disappears.
Open a Help to Buy ISA or Lifetime ISA urgently if you haven't already.

Would a lifetime isa be better than a help to buy ISA? or should i do both?

saajan_12 · 18 September 2017 at 9:49AM

Minimal stamp duty at this level, but you'd need money for solicitors / surveys / mortgage application.. min £2k, leaving a £12k deposit. Your max borrowing / purchase price is based on the lower of two things:

1) Affordability: Loan 4.5x salary = 90k
2) Deposit / LTV: with 12k deposit, a 90% mortgage = 108k loan

The limiting factor is your affordability, I expect you'd be able to borrow 90k, so with 12k deposit and 2k costs, that's a £102k purchase price.

To raise this, look into raising your income and check with a broker whether they can find lenders with lower affordability criteria.

System · 18 September 2017 at 12:22PM

bones85 wrote: »

Would a lifetime isa be better than a help to buy ISA? or should i do both?

You can't do both - it's one or the other. You have to have had a lifetime ISA open for a year before you can use it for a house purchase, so unless you're thinking of staying at home for another year then it'll have to be a HTB ISA.

Of course, you could always aim to stay at home for another year and drip your savings into a LISA, with the idea that you'll buy next September. Your bonus would be an extra £1k as long as you put the maximum in each month (which you could, since you have the money) and you could keep saving over the next 12 months to build your deposit further.

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1st time buyer solo

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