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  • FIRST POST
    • krustylouise
    • By krustylouise 14th May 18, 8:58 PM
    • 1,476Posts
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    krustylouise
    House buying
    • #1
    • 14th May 18, 8:58 PM
    House buying 14th May 18 at 8:58 PM
    Hi all,

    Its been a long long time since I've posted on here and life has been hectic! My husband and I are hoping to, in the near future, but our own home.

    We are both working full time and earning an okay income. I am self employed and husband is employed.

    We stupidly started looking at houses with a view of keeping our eyes on the market, and have now started feeling impatient and wanting our own house NOW. We are looking at being able to get a mortgage of approximately £170,000. We currently save but we only have £2000. I have a help to buy ISA and hubby has a share save scheme through his work. We save £450 per month but have scope to save more.

    We have a car on finance to pay off, I have a credit card with £1800, a sofa on 0% finance to pay off. Our debt to available credit ratio is approximately 40%.

    We rent and our rent is very low. We have two children and don't pay childcare.

    We have received a lot of advice, some good and some very bad and so thought I would come here to keep us on the straight and narrow!

    We both keep a close eye on our credit scores which seem to be doing well and have slowly increased.

    Any advice and helo if very much appreciated.

    Thanks in advance.
Page 1
    • steampowered
    • By steampowered 14th May 18, 9:14 PM
    • 2,843 Posts
    • 2,815 Thanks
    steampowered
    • #2
    • 14th May 18, 9:14 PM
    • #2
    • 14th May 18, 9:14 PM
    It is great that you have a goal. However it sounds like you need to save much more to have a viable deposit.

    The best advice I can give you is to stop buying things on finance.

    If you buy something on finance, you are usually both overpaying for the basic product and paying through the nose for the finance.

    If you need to use finance to buy a car or a sofa - you can't afford it.

    Save for it instead. That way the money you are spending will seem much more 'real' than a monthly payment, so you'll think more carefully before spending.
    • csgohan4
    • By csgohan4 14th May 18, 9:29 PM
    • 4,879 Posts
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    csgohan4
    • #3
    • 14th May 18, 9:29 PM
    • #3
    • 14th May 18, 9:29 PM
    Stop looking for houses as this will give you false hope, you need to hammer your own debt and start to save, 2000 is not enough to even cover the stamp duty and solicitor costs e.t.c.


    Try the debt free wannabee forum, patience is key here
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
    • krustylouise
    • By krustylouise 14th May 18, 9:31 PM
    • 1,476 Posts
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    krustylouise
    • #4
    • 14th May 18, 9:31 PM
    • #4
    • 14th May 18, 9:31 PM
    I can see exactly what you're saying. The car we bought was a 7 seater, I needed it for the job I do and having it has allowed me to earn more money.

    The sofa - totally unnecessary buy but we have it and are paying it off now.

    Credit card has been transferred to a lower APR one and I'm paying it off monthly.

    Realistically what deposit should we be looking at? Would 5% be enough? Obviously I know the bigger the better in terms of deposit but what is the general consensus?
    Any advice is greatly appreciated - thank you.
    • hazyjo
    • By hazyjo 14th May 18, 9:55 PM
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    hazyjo
    • #5
    • 14th May 18, 9:55 PM
    • #5
    • 14th May 18, 9:55 PM
    So you've only really been saving 2-3 months, or do you keep dipping into your savings?

    Some things week can want and buy immediately (as you've experienced!) but you really will have to dig deep for a lot more patience when it comes to buying a house.

    Clear the debt before saving a penny. Counterproductive otherwise. You're paying to borrow what you already have!
    2018 wins: Single Malt Whisky; theatre tickets; festival tickets; year of gin(!); shoes
    • Cakeguts
    • By Cakeguts 14th May 18, 10:42 PM
    • 4,856 Posts
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    Cakeguts
    • #6
    • 14th May 18, 10:42 PM
    • #6
    • 14th May 18, 10:42 PM
    You don't have £2000 in savings. You only have £200. That is the differecnce between the debt on your credit card and your savings. The debt almost wipes out all of your savings. Debt cancels out savings.

    To buy a house worth about £170k you are going to need a 10% deposit plus around £2k in money for buying costs so you should probably aim to save around £20k. However you will never do this if you keep buying on credit or taking out car finance.

    Out of that £20,000 so far you have managed to save about £200. If you want to buy a house you need to do some serious saving.

    There is no point in looking at houses to buy now. Have you really only been saving for 4 months? If so this is much too soon to be looking at houses. To be buying a house now you needed to have started saving several years ago.
    • krustylouise
    • By krustylouise 15th May 18, 10:26 AM
    • 1,476 Posts
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    krustylouise
    • #7
    • 15th May 18, 10:26 AM
    • #7
    • 15th May 18, 10:26 AM
    Stop looking for houses as this will give you false hope, you need to hammer your own debt and start to save, 2000 is not enough to even cover the stamp duty and solicitor costs e.t.c.


    Try the debt free wannabee forum, patience is key here
    Originally posted by csgohan4
    You're absolutely right. I think we have been naive in our quest. We didn't even consider stamp duty.
    • krustylouise
    • By krustylouise 15th May 18, 10:28 AM
    • 1,476 Posts
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    krustylouise
    • #8
    • 15th May 18, 10:28 AM
    • #8
    • 15th May 18, 10:28 AM
    So you've only really been saving 2-3 months, or do you keep dipping into your savings?

    Some things week can want and buy immediately (as you've experienced!) but you really will have to dig deep for a lot more patience when it comes to buying a house.

    Clear the debt before saving a penny. Counterproductive otherwise. You're paying to borrow what you already have!
    Originally posted by hazyjo
    Yes we only started saying 4 months ago. My husband had a lump sum come out of his wages every month, this will be saved over a period of 3 years and at the end of the 3 years we have the option to get it all out or put it in shares and hopefully see growth. The amount is guaranteed so we can't lose money we have put in. I also have a help to buy isa that I transfer £200pm to. I also have money that I pay off the credit card with.
    • krustylouise
    • By krustylouise 15th May 18, 10:29 AM
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    krustylouise
    • #9
    • 15th May 18, 10:29 AM
    • #9
    • 15th May 18, 10:29 AM
    You don't have £2000 in savings. You only have £200. That is the differecnce between the debt on your credit card and your savings. The debt almost wipes out all of your savings. Debt cancels out savings.

    To buy a house worth about £170k you are going to need a 10% deposit plus around £2k in money for buying costs so you should probably aim to save around £20k. However you will never do this if you keep buying on credit or taking out car finance.

    Out of that £20,000 so far you have managed to save about £200. If you want to buy a house you need to do some serious saving.

    There is no point in looking at houses to buy now. Have you really only been saving for 4 months? If so this is much too soon to be looking at houses. To be buying a house now you needed to have started saving several years ago.
    Originally posted by Cakeguts
    Wow really? Several years? That's a real bump back down to reality!
    • Cakeguts
    • By Cakeguts 15th May 18, 10:58 AM
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    Cakeguts
    Wow really? Several years? That's a real bump back down to reality!
    Originally posted by krustylouise
    Well you can work it out. Realistically to get a mortgage you are going to need to have 10% of the purchase price saved in the bank so that for a £170,000 house is £17,000. So you need £17,000 in savings just for the deposit. Then on top of that you also have to have saved to pay for the stamp duty, solicitors fees, removal costs, and fees for surveys so you can work out how much that would be. That has to be saved before you start to look at houses. So you can work out how long that will take at £450 per month say £5000 a year roughly. At that rate you are looking at 4 years. The only way you can make it quicker is to save more.

    At the rate you are saving at the moment you will be ready to buy in about 4 years time if you don't buy anything else on credit and if you don't buy another car on finance.

    There is no point in looking at houses now.
    • hazyjo
    • By hazyjo 15th May 18, 11:01 AM
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    hazyjo

    At the rate you are saving at the moment you will be ready to buy in about 4 years time if you don't buy anything else on credit and if you don't buy another car on finance.
    Originally posted by Cakeguts
    Presuming prices stay roughly the same (or drop!) or in line with your pay rises, etc. My last house nearly doubled in price in 3-4 years.
    Last edited by hazyjo; 15-05-2018 at 11:01 AM. Reason: added 'or drop'
    2018 wins: Single Malt Whisky; theatre tickets; festival tickets; year of gin(!); shoes
    • Grezz24
    • By Grezz24 15th May 18, 11:02 AM
    • 168 Posts
    • 187 Thanks
    Grezz24
    Some doomsayers on here.

    Firstly if you go help to buy on a new build you only need 5% deposit, not 10%.
    secondly you dont pay stamp duty under a certain value for a first home

    so what was told as £20,000 is now actually £8500 (5%) as there are many free free brokers out there.

    When applying for a mortgage the lender looks at your total incoming per month(say £2000 as an example) and total outgoing (including couch and car etc) and say you are left with £1000 left then they work on affordability if the rates rise etc to see if you can afford the price.

    many people have credit cards and agreements in place and still get a mortgage. I would post this on the mortgage and endowments page and get advice from the brokers on there they are very helpful.
    • Grezz24
    • By Grezz24 15th May 18, 11:05 AM
    • 168 Posts
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    Grezz24
    also a point to add we are looking at new builds now and we have £7000 saved and need about £11000 for our deposit, but the new build we are after isnt ready until early next year so we are potentially about to reserve it - knowing our deposit will be there for when its ready to complete.

    if we had started to look when we had the full5% we would have been waiting several months for the n next batch of homes to be released.
    • Nicosy
    • By Nicosy 15th May 18, 11:51 AM
    • 12 Posts
    • 12 Thanks
    Nicosy
    I assume you're a first time buyer? Not considering stamp duty isn't too bad in that case as the 2017 Budget brought in new rules for first-time buyers that are supposed to help more people get onto the property ladder by reducing the amount of stamp duty youíll pay if you spend less than £500,000 on a property. If you spend less than £300,000 on your property, youíll pay ZERO stamp duty.

    So long as youíve never owned any property, anywhere, any time, youíre ok.
    • ReadingTim
    • By ReadingTim 15th May 18, 12:12 PM
    • 2,932 Posts
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    ReadingTim
    Some doomsayers on here.

    Firstly if you go help to buy on a new build you only need 5% deposit, not 10%.
    secondly you dont pay stamp duty under a certain value for a first home

    so what was told as £20,000 is now actually £8500 (5%) as there are many free free brokers out there.
    Originally posted by Grezz24
    £8,500 at £450 per month is still a year and a half. Obviously not as long as the 3-4 years previously mentioned, but hardly tomorrow, or really any time "in the near future" either.
    • krustylouise
    • By krustylouise 15th May 18, 12:55 PM
    • 1,476 Posts
    • 2,614 Thanks
    krustylouise
    Some doomsayers on here.

    Firstly if you go help to buy on a new build you only need 5% deposit, not 10%.
    secondly you dont pay stamp duty under a certain value for a first home

    so what was told as £20,000 is now actually £8500 (5%) as there are many free free brokers out there.

    When applying for a mortgage the lender looks at your total incoming per month(say £2000 as an example) and total outgoing (including couch and car etc) and say you are left with £1000 left then they work on affordability if the rates rise etc to see if you can afford the price.

    many people have credit cards and agreements in place and still get a mortgage. I would post this on the mortgage and endowments page and get advice from the brokers on there they are very helpful.
    Originally posted by Grezz24
    Thank you so much. After being on here this morning I felt very down hearted. We have spoken to a broker, in fact two. One seems a lot more professional than the other so we will be working with him when the time comes I suspect. I will pop over to the other thread- thanks again.
    • krustylouise
    • By krustylouise 15th May 18, 12:56 PM
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    krustylouise
    £8,500 at £450 per month is still a year and a half. Obviously not as long as the 3-4 years previously mentioned, but hardly tomorrow, or really any time "in the near future" either.
    Originally posted by ReadingTim
    I guess people views on timeframes is all subjective isn't it? My near future (as in a year or so is much different to meaning now. Thanks for your advice though.
    • csgohan4
    • By csgohan4 16th May 18, 7:21 AM
    • 4,879 Posts
    • 3,114 Thanks
    csgohan4
    Some doomsayers on here.

    Firstly if you go help to buy on a new build you only need 5% deposit, not 10%.
    secondly you dont pay stamp duty under a certain value for a first home

    so what was told as £20,000 is now actually £8500 (5%) as there are many free free brokers out there.

    When applying for a mortgage the lender looks at your total incoming per month(say £2000 as an example) and total outgoing (including couch and car etc) and say you are left with £1000 left then they work on affordability if the rates rise etc to see if you can afford the price.

    many people have credit cards and agreements in place and still get a mortgage. I would post this on the mortgage and endowments page and get advice from the brokers on there they are very helpful.
    Originally posted by Grezz24


    HTB has it's own problems, you must pay back the loan after 5 years or accrue interest. You will usually pay back more than you borrowed due to increase in house prices. It's a scam imho, kicking the can down the road, also it's not available with every house/flat it has criteria
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
    • MERFE
    • By MERFE 16th May 18, 8:14 AM
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    MERFE
    Try not to get too disheartened, you have a goal and are working towards it. I started in a similar position to you about a year ago only with more debt. At first we concentrated on paying off the debt but since it was all 0% we now save whilst repaying. We have £1700 left to pay on the credit card and £7000 saved so far. We will be looking to buy at the end of the year or possibly save further, house prices here are not rapidly increasing but suitable houses only pop up every now and again so we will continue to save until the right house is available. Don't lose your focus and every month you will get a little closer to that goal.
    • hazyjo
    • By hazyjo 16th May 18, 9:48 AM
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    hazyjo
    At first we concentrated on paying off the debt but since it was all 0% we now save whilst repaying. We have £1700 left to pay on the credit card and £7000 saved so far.
    Originally posted by MERFE
    How much do you pay in interest each month on the credit card now? (Or maybe I'm mis-reading and you mean you 'is' 0%, not 'was'? If zero, ignore the line below!)


    I really don't get it. Surely you'd be better off clearing the credit card and having £5,300 in savings
    Last edited by hazyjo; 16-05-2018 at 9:49 AM. Reason: (added line to end of first para)
    2018 wins: Single Malt Whisky; theatre tickets; festival tickets; year of gin(!); shoes
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