First Time Buyer

[l354uge]

Hi all, been saving for a while now and will be ready to start looking for a house come May.
Before I get some more formal advice from an advisor I have a question or two.

1. Currently have £5.5k of (0 interest) credit card debt, and need to fill the last £4k of my Lisa, im on course to have enough to do these by June but which should I pay first? Will wiping out the debt just before I apply for a mortgage impact negatively on my mortgage chances?

2. How early do the surveyor fees etc come in the process, and what kind of ballpark figure would these "pre-deposit" services come too? I don't want to find myself short before the mortgage application.

Thanks

[illmonkey]

l354uge said:

Hi all, been saving for a while now and will be ready to start looking for a house come May.
Before I get some more formal advice from an advisor I have a question or two.

1. Currently have £5.5k of (0 interest) credit card debt, and need to fill the last £4k of my Lisa, im on course to have enough to do these by June but which should I pay first? Will wiping out the debt just before I apply for a mortgage impact negatively on my mortgage chances?

2. How early do the surveyor fees etc come in the process, and what kind of ballpark figure would these "pre-deposit" services come too? I don't want to find myself short before the mortgage application.

Thanks

1. Debt isn't always bad with a mortgage, you can still get a mortgage with debt, providing it's serviced and not a crazy amount. But, it depends on your salary. £20k/year with over £5k of debt is bad, on £100k/year and it's nothing. A mortgage advisor will guide you on this.

2. Fees are pretty static, an example below. Use a stamp duty calculator to see how much that'll be, but it'll be in the thousands too.

Legal Fees £1,200.00
Searches £300.00
Land registry £200.00
Mortgage arrangement £1,500.00
Mortgage valuation £350.00
Mortgage TT £50.00
Surveyor £800.00
Removals £1,000.00

Most of the legal fees will be invoiced upon exchange/completion. Surveyor will be well before, as well as mortgage fees.

[Sarnie]

illmonkey said:

Legal Fees £1,200.00
Searches £300.00
Land registry £200.00
Mortgage arrangement £1,500.00
Mortgage valuation £350.00
Mortgage TT £50.00
Surveyor £800.00

These are all too high...………...

[number2]

Sarnie said:

illmonkey said:

Legal Fees £1,200.00
Searches £300.00
Land registry £200.00
Mortgage arrangement £1,500.00
Mortgage valuation £350.00
Mortgage TT £50.00
Surveyor £800.00

These are all too high...………...

Yeah. Mortgage fee say £1k although give the size of mortgage the rate differential between fee and no fee might lead one to opt for no fee.

Valuation survey will likely be included so that disappears, and depending on what you buy you may rule out any more detailed survey - flat etc.

Legal fees, depends on who you use but not necessarily too far out.

You'll need to pay for searches and other disbursements up front - you'll pay a retainer to cover these. Can usually put any mortgage fee on the mortgage IF you need to (subject to LTV), survey fees (if there are any) payable up front, and the rest of the fees payable on completion.

Edited by number2 on Thursday 28th March 13:32

[illmonkey]

number2 said:

Sarnie said:

illmonkey said:

Legal Fees £1,200.00
Searches £300.00
Land registry £200.00
Mortgage arrangement £1,500.00
Mortgage valuation £350.00
Mortgage TT £50.00
Surveyor £800.00

These are all too high...………...

Yeah. Mortgage fee say £1k although give the size of mortgage the rate differential between fee and no fee might lead one to opt for no fee.

Valuation survey will likely be included so that disappears, and depending on what you buy you may rule out any more detailed survey - flat etc.

Legal fees, depends on who you use but not necessarily too far out.

It was an example really. All of the local places here are £1200 for legal fees.

Mortgages can come with £1500 fee's, and same with the valuation. Rolling them into the mortgage doesn't make them disappear!

[number2]

illmonkey said:

It was an example really. All of the local places here are £1200 for legal fees.

Mortgages can come with £1500 fee's, and same with the valuation. Rolling them into the mortgage doesn't make them disappear!

I agree, but it is an option for someone who hasn't got the cash up front - I wouldn't want to pay interest on the fee for 25+ years, but I don't need to.

I'm in the process now, had a £1k fee which was way less than the interest saved over a year for the deal without the fee. The OP will be able to find a low fee/fee free mortgage, and also be able to find one with a £1,500 as well

[Sarnie]

illmonkey said:

It was an example really. All of the local places here are £1200 for legal fees.

Mortgages can come with £1500 fee's, and same with the valuation. Rolling them into the mortgage doesn't make them disappear!

The solicitor that looks after our clients is just over £1k including legal fees, searches and VAT.

There are hardly any rates with £1500 fees...……….£999 is standard and lots with less/no arrangement fees.

Most product these days have free valuations too...……...not many people would request a full structural survey at circa £800.....a few pay for Home Buyers reports at about £300 usually.....

[l354uge]

Thanks guys, lots of great info.

So mortgage fees can be absorbed into the mortgage? Also, I've heard some sellers will let you reduce the exchange deposit if you're a first timer with a Lisa? People never tell you about that deposit, just the mortgage one.

I will see if I can pay off my credit card with the offers ending soon and leave some of the debt in the other. Some mortgage allowance calculators punish for having debt more than others.

Got a joint income of £72k and a deposit of £30k so looking to spend around £250-300k on a place (any more and we start paying stamp duty)

[illmonkey]

Not sure if he's allowed to say, probably not, otherwise he would! But Sarnie is your mortgage man, PM him.

The deposit is the same, just some places will let you put less of it down on exchange, rest on completion. There aren't 2 deposits!

[ta-kro]

If you plan on using your fund from your LISA I suggest you look into how to do that now. I've heard some contracts make it difficult and can delay things when you really don't want to. Good luck.

[l354uge]

Thanks again guys, one more thing; I received my P60 today and it had the wrong address on it, I've now asked the finance guy to change it to the address i am registered to for banks and driving licence, but will the P60 being in a different address to the one on my credit report cause any issues at mortgage time?

[dogz]

Sarnie said:

The solicitor that looks after our clients is just over £1k including legal fees, searches and VAT.

There are hardly any rates with £1500 fees...……….£999 is standard and lots with less/no arrangement fees.

Most product these days have free valuations too...……...not many people would request a full structural survey at circa £800.....a few pay for Home Buyers reports at about £300 usually.....

I agree - I usually pay c£1k - maybe a bit more for all the legal work. The solicitors fees are usually £400-£500 plus the searches and VAT were applicable. These are not internet based companies but ones which specialise in convayancing and where you can pop in to see the solicitor when required. To get the ball rolling you will usually need to pay the searches up front - £200ish

If you have Excel then use the PMT function to calculate the monthly costs based on interest rate, term and what you borrow - you can soon work out if its worth paying a fee for a lower interest rate

Best of luck

[Killer2005]

l354uge said:

Thanks again guys, one more thing; I received my P60 today and it had the wrong address on it, I've now asked the finance guy to change it to the address i am registered to for banks and driving licence, but will the P60 being in a different address to the one on my credit report cause any issues at mortgage time?

Shouldnt do.

[Sarnie]

l354uge said:

Thanks again guys, one more thing; I received my P60 today and it had the wrong address on it, I've now asked the finance guy to change it to the address i am registered to for banks and driving licence, but will the P60 being in a different address to the one on my credit report cause any issues at mortgage time?

It will be questioned but won't be an issue for you...…….

[l354uge]

So.. Viewed a few places and found the perfect place, went back for a 2nd viewing yesterday to confirm some work I would want to do was viable. Was told a couple viewed in the morning and offered £290k (listed for 295),but they haven't even listed their house yet.

We offered £280k this morning and asked the agent to make sure they know we have no chain below us and have no issue with waitimg for the sellers to find somewhere. Was rejected pretty swiftly, told we would need to match the other offer.

I'm holding ground as looking at other properties in the area I think it's would be valued at £260-270k, I can accept paying £10k upfront but not more. I sent an email to the agent explaining this position and to forward it on to the sellers. I've heard nothing since.

Am I doing the right thing? We love the house but it is overpriced and I think the other bidding couple are just giving them false hope to make them wait. Anything more I can do to change their mind?

[CubanPete]

If it's overpriced, I would sit tight for another to come along, or re-offer in a month's time.

You are in a very strong position with no chain.

[Testaburger]

l354uge said:

So.. Viewed a few places and found the perfect place, went back for a 2nd viewing yesterday to confirm some work I would want to do was viable. Was told a couple viewed in the morning and offered £290k (listed for 295),but they haven't even listed their house yet.

We offered £280k this morning and asked the agent to make sure they know we have no chain below us and have no issue with waitimg for the sellers to find somewhere. Was rejected pretty swiftly, told we would need to match the other offer.

I'm holding ground as looking at other properties in the area I think it's would be valued at £260-270k, I can accept paying £10k upfront but not more. I sent an email to the agent explaining this position and to forward it on to the sellers. I've heard nothing since.

Am I doing the right thing? We love the house but it is overpriced and I think the other bidding couple are just giving them false hope to make them wait. Anything more I can do to change their mind?

I take the slightly contrarian view that if it’s the perfect place that you’ll live in for years, lowballing by a few grand (or 3%) just isn’t worth it. Nice to have, but not worth losing the perfect house over. Just my opinion.

I went straight in at 7.5% below asking, rejected, and upped my offer to 2.5% under list. The property had a lot of interest so I just wanted to give myself the best possible chance of securing it. A few thousand in the grand scheme of things doesn’t make the slightest bit of difference.

Worth pointing out that I was searching as a cash/low LTV buyer, so I wasn’t concerned about the lenders valuation. If you’re maxing out your LTV, then obviously the lenders valuation essentially becomes your offer limit.

FYI my solicitors fees were 900 including searches etc.

I bought before the new stamp duty laws, so I had to pay that, too.

I needed a full-monty survey as it is a 250 year old house. 900 quid.

Edited by Testaburger on Sunday 7th April 05:08

[l354uge]

So we've given up on that place, we wouldn't even pay £280k now looking at other places.

We've found a great place, 4 beds, detached and a double garage. It's next to a lovely big field too.

Now a worry I have is this hatching on the deeds, the agent didn't have the rest of the deed but I'm guessing it means shared access? Is that with the house opposite or the farmers field incase they want to build on the greenbelt?

[devnull]

The solid line is your boundary of your land.

The hatched part may indicate a separate title of land which has been merged into your title and now your boundary

I have this - my house had a section of land running through it which wasn’t owned by previous owners of the house (it belonged officially to a defunct developer). When they sold the house to us, they needed to go through adverse possession to claim that section of land. What resulted was the land registry altering the boundaries and showing the incorporated strip of land as a hatched section.

By the ways, you pay a solicitor to tell you all of this, ask them!

[l354uge]

We haven't even heard back from our offer yet so we haven't involved our solicitor yet.

I got impatient with the slow estate agents so I bought the deed and plans from the registry office. Looks like the hatched section is part of our boundary but another party has the right to turn it into a road if the field next door is developed. Which is a shame but its what I was expecting.