Mortgages......advice for a first time buyer

[beanbag]

Hello all,

Seeing as a lot of you here are well settled (by the sound of it anyway), a lot of you have experience with mortgages.

I'm just about to step on the ladder and was wondering if anyone could offer any advice before I venture into the banks?

The price of property I'm currently looking at is around the £120,000 area. I know this is a lot but I live around Berkshire and would prefer to buy a two bedroom place so I can rent a room to someone and use that to pay for a portion of my mortgage.

My current salary is between £20 and £25k (i'd like to keep that vague), so any suggestions on what I should do?

Before I leave it with you all, I've found an interesting product from Scottish Widows where they are offering graduates what seems to be a good offer for first time graduate buyers.

Thanks all for your help once again!

[TheMaskedAvenger]

get yourself over to moneysupermarket.com or the like to get a feel for whats out in the market.

I have found its worth getting an independant financial bod to give you a hand costs a bit but you can usually save that in the first year of the mortgage.

So much choice and lots of factors to just say this type of mortgage.

You need to think about what is important to you, a steady interest rate or the ability to move mortgage at a whim. Lots to think about and take some time with a pro will help

[Mr E]

www.charcolonline.co.uk/ is a could place to have a hunt for possible deals and cost ideas.

[titiany]

Beanbag - have you got a deposit?

[jimothy]

www.fool.co.uk

Always good impartial advice.

[dieseljohn]

Thats a lot of money to borrow on 20-25k even with a lodger. I went along the same route with a similar wage but a much smaller mortgage (nottingham vs. berkshire). May be worth considering a fairly long term fixed rate so you don't get an nasty suprises if interest rates go up. If they go down you lose out though.

I'm estimating but £120k mortgage will be ~£700 p/m out of your take home pay of ~£1300 + £300 for lodger. A lot but do-able. Interst rates up 2-3% and you could be looking at £1000 p/m though which would hurt.

Depends on what other financial considerations you have. Got a car on finance? Likely to get a big pay-rise anytime soon? Student loans bitting?

[mr_tony]

getting lent 6x salary is pushing it a bit - could be tricky - best of british though.

Remember also to factor in standing costs of house ownership - 200 a month is about right for gas/electric/water/counciltax/tv licence/house insurance etc

Being honest however - why buy right now?
Prices are static / if not softening in many areas - rent is currently cheap (I sold up at christmas - got cash in the bank making 5% where houses where I did live are selling for less than I got for mine...)

I'll buy again soon enough (can't prevail on mates spare room for ever!) but until things start moving again - no big rush - in the meantime save more cash for more deposit...

[minimax]

beanbag said:

The price of property I'm currently looking at is around the £120,000 area. I know this is a lot but I live around Berkshire and would prefer to buy a two bedroom place so I can rent a room to someone and use that to pay for a portion of my mortgage. My current salary is between £20 and £25k (i'd like to keep that vague), so any suggestions on what I should do?

unless you get a grad mortgage from your bank that offers you 5.5 times your income you will struggle to acheive this amount on an income of 22.5k (20-25k???) one of the only lenders (off the top of my head) that will help you apart from this is first national who do a product that allows you up to 6X your income within certain parameters...but the product is sub prime and the rate is loaded (7.59% 2 yr fix anyone? ) which would further tighten your belt. you could look at the together product from northern rock (mortgage express and leeds & holbeck do this type of product too) which would mean 95% secured loan and then 30% (up to max 30k) unsecured loan at the same rate as the mortgage which you could then use as a deposit

[richie_few]

First of all..... GOOD LUCK!!! i exchanged contracts today on my first house with the intention on completing nxt week. im 21 i buying with my girlfriend. we have bought a 1 bed house for 120k in bucks. its not a cheap process thou mate. We found the nationwide were the best on the amount they will lend you they offered us nearly 200k but we decided we wanted to have a live aswell as a house so we settled on spending 120k.

pm me if you want more info. Im not a specialist in these things but ive just been through it.

[smirnoff]

If you would like free professional advice email me through my profile.

but roughly looking at your situation it looks unlikely.

The Scottish Widows graduate mortgage will lend you 102% and their professional graduate 110% (lawer, accountant) but maximum is 5x income.

[bga]

richie_few said:

First of all..... GOOD LUCK!!! i exchanged contracts today on my first house with the intention on completing nxt week. im 21 i buying with my girlfriend. we have bought a 1 bed house for 120k in bucks. its not a cheap process thou mate. We found the nationwide were the best on the amount they will lend you they offered us nearly 200k but we decided we wanted to have a live aswell as a house so we settled on spending 120k. pm me if you want more info. Im not a specialist in these things but ive just been through it.

Another vote for the Nationwide - they gave us a higher than average multiple but we fixed for 3 years for a bit of stability. We told them what we could afford and we went from there.