First time buyer

[fiatpower]

Me and the OH are looking at purchasing our first property, we are both 24 and have well paying jobs for our age (combined basic income of around £50k plus shift allowances). Together over the past year we have saved £10k which should enable us to put a 5% deposit down on a £200k house which seems the norm for a 3 bed semi in the area we are looking (Sutton Coldfield). We are just coming to the end of a 12 month tenancy agreement and are moving to another house on a 6 month agreement and are hoping we will have somewhere to go by the end of that tenancy! We are going to carry on saving to build our deposit and also save for the fees that go with a house purchase so that we will be ready by then.

I have been reading into mortgages but seem to have come across quite a lot of conflicting info so looking for some clarification.

1. Do you have to have an agreement in principal prior to viewing a house, especially if you want to be taken seriously?

2. Is it best to go through the banks or a mortgage advisor?

3. We have been looking at £200k houses, but I would be equally happy to take one of the £170/180k houses in the area that need refurbishment. Would I be forced to only take a £170k mortgage for the value of the house and a bank loan on top or could I take a £200k mortgage and use the left over cash to refurb?

[Sarnie]

fiatpower said:

Me and the OH are looking at purchasing our first property, we are both 24 and have well paying jobs for our age (combined basic income of around £50k plus shift allowances). Together over the past year we have saved £10k which should enable us to put a 5% deposit down on a £200k house which seems the norm for a 3 bed semi in the area we are looking (Sutton Coldfield). We are just coming to the end of a 12 month tenancy agreement and are moving to another house on a 6 month agreement and are hoping we will have somewhere to go by the end of that tenancy! We are going to carry on saving to build our deposit and also save for the fees that go with a house purchase so that we will be ready by then.

I have been reading into mortgages but seem to have come across quite a lot of conflicting info so looking for some clarification.

1. Do you have to have an agreement in principal prior to viewing a house, especially if you want to be taken seriously?

2. Is it best to go through the banks or a mortgage advisor?

3. We have been looking at £200k houses, but I would be equally happy to take one of the £170/180k houses in the area that need refurbishment. Would I be forced to only take a £170k mortgage for the value of the house and a bank loan on top or could I take a £200k mortgage and use the left over cash to refurb?

1) No.

2) Depends on a lot of variables such as your circumstances, requirements and knowledge/experience/confidence of sorting it yourself.

3) No, you will only be able to borrow up to 95% of your properties purchase price.


PS: I'm a broker and local to you (Coleshill)

Edited by Sarnie on Tuesday 9th June 07:47

[Moulder]

swerni said:

Point 3 means you're going to have to save a little longer

Or move in and do the work as and when you can afford to do it, though don't underestimate the time/effort/ball ache you may have to put in for your 20-30k initial saving.

[SunsetZed]

Moulder said:

Or move in and do the work as and when you can afford to do it, though don't underestimate the time/effort/ball ache you may have to put in for your 20-30k initial saving.

Don't underestimate the cost of the work required either!

I'd recommend making a list of what you could live with and for how long you could put up with it before work would be required. Also for things like kitchens have a look at whether it would all need ripping out or could you replace doors and / or worktops or even just paint doors in some cases. This may not make it a dream house but would it keep you happy for x amount of years / the time you plan to live in the house etc.

[Shirt587]

fiatpower said:

1. Do you have to have an agreement in principal prior to viewing a house, especially if you want to be taken seriously?

From my experience a couple of years ago: No, but it really helps. You're a first time buyer which means no chain, and some sellers will be extremely happy to see you for that reason alone. If you've got something that says the funds are likely to be available it adds to the reason for them to sell to you instead of the person offering 5k more but who has to flog their falling down 2 bed terrace in a crap area first...

[Moulder]

swerni said:

Moulder said:

swerni said:

Point 3 means you're going to have to save a little longer

Or move in and do the work as and when you can afford to do it, though don't underestimate the time/effort/ball ache you may have to put in for your 20-30k initial saving.

But you're ignoring the fact they only have 5% for the deposit

Not really, if he has 5% if 200k he has 5% of 170k so can still make the initial purchase, year 1 save the same 10k as they did for the deposit and get the heating/water/electrics done, year 2 another 10k and do the kitchen, etc.

It can be a pain in the arse though, I bought a big place that hadn't been touched since the seventies, by the time it was finished I wished I had just bought 70's clothes and changed myself instead of the house.