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Mortgage Advice Please.

abillybob

By abillybob
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abillybob

abillybob

Posted
Posted

Hey Guys,

 

Starting to look at houses to buy in my area. I've hit a BIG roadblock though and was just wondering what all your thoughts where regarding this. Basically after doing some research I found that I am able to get a Mortgage for £76,638 over a 30 year term. I earn around 20k a year though I do get annual increments.

 

I thought this kind of money that I earn is a decent amount though 76k Mortgage won't buy me a nice house, the only houses I can afford are in cr*ppy areas which I'd much rather not live in. The interesting thing is though that I can buy a 2 Bedroom lodge in a nice area by me and it's lovely but I don't think the bank would give me a mortgage for a lodge?? I'm not in a rush to move though I would like to in the next couple of years and don't want to Rent.

 

Are there government grants and things that will help me out, I've heard about a first buyers scheme or something!?

 

I'm all a bit new to this though I'd love to hear your opinions, I'm 21 soon and if you think that's too early then I'd like to hear from you!!

 

Thanks Guys :)

elsiegee40

elsiegee40

Posted
Posted
Personally, I think it's a bit too early @abillybob. Wait a bit, save some of your hard earned cash in an account where it'll be hard to get at quickly and wait a few years. You will have a decent size deposit, you will have more idea where your life and career are heading and your bank is more likely to lend you the money.
lmgtfy

lmgtfy

Posted
Posted

Might be worth looking into shared ownership houses. There are some new builds where I live typically a two bed is going for £155k but with shared ownership you can buy 50% and then buy the rest later when you earn more etc or just pay rent on the rest. Not going to pretend I know much about it but it may pay to do some research as you could possibly get on the ladder this way.

 

Also when I was looking the shared ownership houses were often of better spec complete with solar panels, better heating etc.

rad

rad

Posted
Posted

Advise from a saver ...

 

Set up a direct debit to a new account, one which doesn't have a card attached and preferably an isa so it gains you something. Make the payments come out the day after you get paid, that way you will never see it.

 

I too would stay where you are, the bigger the deposit, the better LTV (loan to value) you will have and the better mortgage rates will apply.

 

Moving houses costs money, so finding somewhere is going to be home for at least 10 years, why 10... Cos when selling you have estate agent fees, stamp duty and solicitor fees to pay for, for the place you sell and the place you buy. You won't have to pay any estate agent fees or stamp duty on your first place.

 

So for now, save save save, if you rent, all outgoings are the same whether it's your place or someone else's. At 21 it is early, I moved out at 22 with the help of "The bank of Mum and Dad", I was fortunate, it doesn't happen to everyone.

eyetea

eyetea

Posted
Posted

Open an ISA! You can put a good whack in them now, and it also deters you from taking any money out (usually you'd have to close the account / lose whatever interest you have on it) - When I was saving I opened a Save to buy ISA with Nationwide :)

 

Are you still living at home? If you are - work out roughly what you'd have as outgoings in a month when you move out and try and save that - Decent savings amount + you "won't have that money" when you move out anyway.

 

You may want to save a bit for other costs i.e. decorating\running electrics - I can do a rough breakdown of what it cost us to decorate if you want, feel free to pm me rather than me waffle here!

ascott2

ascott2

Posted
Posted

The cr**py areas you speak of, are they really that bad or just a reputation? When I moved into my last place, I had a lot of funny looks from people when I told them where I lived, but as it turned out it was one of the nicest areas I have lived in, the people were all really nice and I felt safe walking at night. I live in a "nice" area now, but am moving again as my neighbour is, to put it mildly, a "nutjob". Do some research of your own, see what it's really like. Although, if it really is that bad, then listen to other people on here, save, save, save. For me I found moving out early was the best thing I could do, I wasn't great with saving, at least paying off my mortgage I was gaining equity in my home and enabled me to move up the ladder. Started in a 1bed flat, moved to 2 bed maisonette and now about to move into my first house.

 

But remember to take into account costs with moving. There seems to be a trend around my way, of sales by tender, where the buyer stumps up the estate agents costs for the seller. As these are written into condition of sale there is no room for negotiation. Because of this I am currently paying my estate agent fees along with the tender fees which equate to over £6000, something to bare in mind.

JoeBloggs

JoeBloggs

Posted
Posted

If living at home this is the best time to save.

 

Like someone else said, work out your mortgage payment would be on the £76k house, council tax, gas, electric, water, tv lic and see what it all adds up to. (minus anything if you pay a bit of board to your parents) and wack that into a savings account. This will see if you can afford it and get you used to your out goings, will also help save faster!

 

If you're only 20 then you can chill and save for a while yet!

Disaster

Disaster

Posted
Posted
I reckon you got a couple of years before interest rates go up, but, Now is the best time ever to get a mortgage and you can get help and a possible 95% LTV. And remember it's all about location if you want to move up. Save a bit more but don't wait too long.
pcstru

pcstru

Posted
Posted
I reckon you got a couple of years before interest rates go up, but, Now is the best time ever to get a mortgage and you can get help and a possible 95% LTV. And remember it's all about location if you want to move up. Save a bit more but don't wait too long.

Rates can't really go down so it's a "no brainier" that when they do move, they will go up, but that has been the expectation for quite a few years. There are some really good deals around but unless you have a decent deposit, you can't access the really good stuff. Live at home as long as you can, save save save and then save some more. Begrudge every pint, every meal out, every frivolity. Practice your Scottish accent and keep your wallet nailed shut, in a safe, at home.

mole

mole

Posted
Posted

I've found that massive deposit is required.

 

I have a 12.5k deposit, joint income of 37k and on a 30yr mortgage only offered 122k. That's normal mortgage, help to buy mortgage came out the same also.

ascott2

ascott2

Posted
Posted
I've found that massive deposit is required.

 

I have a 12.5k deposit, joint income of 37k and on a 30yr mortgage only offered 122k. That's normal mortgage, help to buy mortgage came out the same also.

 

Take a look at Virgin Money, when my wife stopped work to look after our son, I was worried that I wouldn't be able to get enough on my sole wage, but in the end they offered £157k with essentially 2 dependants.

Edu-IT

Edu-IT

Posted
Posted
What is the standard for maximum they will lend? is it yearly salary(s) * 3.5? *4? I'm guessing this is the limiting factor on getting a large mortgage.

I don't think there's a set rule. I got near on 5* in September.

PotNoodleTech

PotNoodleTech

Posted
Posted

Having just got on the housing ladder myself, I'd say get on the ladder as soon as humanly possible. Get away from paying out rent on something you don't own, and funding the random stranger that you've never met's new Porsche.

 

Best thing I ever did, biggest mistake I ever made is I should have done it 10 years ago!

 

You may be able to use the Govmt help to buy scheme to buy a ~100k house. you put in 5k deposit, govmt put in 15k, you have a £80k mortgage.

penfold

penfold

Posted
Posted

My advise would be is if you are currently renting, try to buy as you are already paying off someone elses mortgage. If you are at home with parents then try to save as much as you can and buy somewhere you will be staying in for longer than you might originally think.

 

We bought our place which which is a 2 bed semi a few years ago which was enough for what we wanted as there was just 2 of us. Now we have a toddler and dog and cat and the house feels very small indeed. If we could have stretched to a 3 bed it would have made a massive difference and would have meant we could live in the same house for longer meaning we wouldn't need to pay moving fees.

Guest Guest

Guest Guest

Posted
Posted (edited)

Buy now! House prices will go up faster than your wages, in the short term at least. Say in 3 years time you are earning £25k, at your current salary*3.8 your mortgage offer will be £95k. How much will these houses in crappy areas go for then? How much will the ones in nice areas be? At least if you are on the property ladder you will be "earning" money on your house, or in other words the equity is your next deposit for the nice area. Also interest rates are sooo low now...

 

I bought my house 3 and a half years ago for £65k. After 2 years it was worth a very conservative £80k (valuation when I remortgaged to another bank. Also by prices paid in my street). Now there is a house up for sale in my street, same house but with a loft conversion but not classed as an extra bedroom, for £125k. I doubt it will go for that but.

 

GFs house was £55k 1 year ago, looks like it will be closer to £65k come 2 year renewal.

 

 

As mentioned go look at these crappy areas for yourself. My GF lives in a crappy area but has had no trouble at all on her road. My parents live in a really nice area but their street has some right loons live there.

 

Have a looky here for average value change over the last few years. http://www.zoopla.co.uk/house-prices/browse/shropshire/?category=residential&q=Shropshire&search_source=nav&so=mean_3_yr&sd=desc

Edited by Guest
andydis

andydis

Posted
Posted (edited)

If you relationship and job is secure i would recommend buy now.

 

Heres what i did:-

 

2004: Took out a 10k "home improvement loan" (used as the deposit) was £125 per month over 10 years and purchased a house for 100k, yes it was in a "crappy" area, we didnt even have furniture for 6 months as we couldn't afford it,saved like mad!

2008: paid off loan early and continued to save ( as wasn't paying back loan)

2012: used the savings to purchase the biggest house i have ever been in (£175k) , in a quiet commuter village , valued this year at £225k

old house rented out for little bit more than the mortgage is (£450 rent pcm), which for a 3 bed is pretty good! and valued at £110-£115

 

its all about planning / saving and when buying anything ask yourself, do i really need this? budget!

Edited by andydis
elsiegee40

elsiegee40

Posted
Posted (edited)

For anyone thinking of buying, I suggest a thorough read of this http://www.moneysavingexpert.com/mortgages/house-buying-guide

 

Don't forget that buying a property not only includes the cost of that mortgage... there are also the associated costs (survey, solicitor, etc), the costs of getting the place secure and liveable... and, most important, the ongoing maintenance, utility and other costs.

 

At the age of 20, with 2 recent job changes, a relatively low income and no long term partner to split the costs with... save now and buy later.

Edited by elsiegee40
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Vegas

Vegas

Posted
Posted
The sooner you're on the ladder the sooner its paid for, don't wait do it now. Look at this way......when you're 45 you'll be mortgage free!! And if you have any sense and spare cash you'll make over payments and get it paid off sooner.
penfold

penfold

Posted
Posted
Just to add that it isn't just the cost that you are looking at now. What you need to consider is moving in the future. With no mortgage you are able to move anywhere without too much consideration and not a lot of notice. When you have a house you are then looking at selling and then buying/renting again when you move. If you are not going to be in the same job/location for the long term it might not be best to put down roots by buying now.

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