First Time Home Buyer Advice/Tips
Discussion
If it was me, I would speak to a mortgage broker first. They will take into account all your salaries, and outgoings, and tell you what you can borrow etc, and what deposit you need. Most are needing 15% deposit, but some are offering 90% mortgages just now, although the rates are higher.
Then you will know what you can offer. Its a buyers market just now IMO so I'd go in lower, then work up.
Then you will know what you can offer. Its a buyers market just now IMO so I'd go in lower, then work up.
Rustie said:
were fairly confident
OH good! 
Google "buying your first home" - loads of sites with advice.
As other have said, use a mortgage broker or approach a lender direct.
Regarding the price, have a look at house price websites to see what similar properties have sold for over the last couple of years. Chat to the estate agent or even neighbours if the opportunity arises and see if you can get any clue about the circumstances - could be a couple who have split up and one might be being awkward about selling.
People are very wary of houses with any issues but on the other hand there's a lot of demand from people probably with your kind of income who are itching to get on the property ladder, especially as they'll be paying a similar amount to rent as the mortgage will cost.
If you say £100/mth for gas & elec on average it should be there or thereabouts. Don't forget water and phone/broadband & TV licence. And cost of mobiles. And council tax. And insurance (buildings & property).
Rustie said:
Ive been told if your first offer doesn't make you cringe then its not low enough....the problem here is i don't easily get embarrassed. My idea of a cheeky offer would be £100k lol.
Realistically though i was thinking of starting at £130k with the aim to meet at £137.5k/140k which doesn't seem to unrealistic to me in the scheme of things.
What would your initial offer/final price be if you were in my shoes?
I'd probably go in at 125k and work up. Realistically though i was thinking of starting at £130k with the aim to meet at £137.5k/140k which doesn't seem to unrealistic to me in the scheme of things.
What would your initial offer/final price be if you were in my shoes?
Although be warned. I offered on a house recently (10% below aaking) and the owner was so disgusted they walked out. Even though they invited us round to negotiate!
Things which may or may not go in your favour:
1) You're a sparky, are you self employed or are you PAYE?
2) If your other half is about to start a new job, some lenders will take fright as there's a higher risk that things won't work out in the probationary period.
Most people start by getting a vague feeling of areas where they'd like to live, as this gives them boundaries within which to limit their searches.
You can go and use some of the affordability calculators on lenders websites such as Nationwide to give you a bit of a clue as to what they're likely to lend you. Take about 15% off what they think is the maximum they'll lend you and that gives you a good ballpark to start from.
With an idea of the size of mortgage you're after, you can start comparing deals with lenders to whittle the choices down to a deal which you're most likely to take up. You can then get yourself a mortgage agreement in principle and go house shopping!
It's a good idea to write down your combined financial commitments per month and see how much headroom it gives you. You might think your mortgage is affordable now, but play through a few scenarios like rates going up .5% each time and losing one salary. Does this leave you with enough each month to pay the essentials like the mortgage, car bills and utilities? Don't forget the money you'll need to set aside for repairs and home improvements. Does the location of the new house affect your car insurance premiums?
It's also a good idea to get hold of a copy of your credit reports, just to make sure there aren't any nasties on there which will give lenders cold feet.
Beyond the 14k, set aside at least 3k for solicitors, searches, valuations, moving costs, furnishing and decorating. You also want another 2k kept back as an emergency fund should things go a bit pete tong in the first few months.
I would also consider saving a deposit closer to 15-20% if possible, that's where the really juicy interest rate deals become available to you.
1) You're a sparky, are you self employed or are you PAYE?
2) If your other half is about to start a new job, some lenders will take fright as there's a higher risk that things won't work out in the probationary period.
Most people start by getting a vague feeling of areas where they'd like to live, as this gives them boundaries within which to limit their searches.
You can go and use some of the affordability calculators on lenders websites such as Nationwide to give you a bit of a clue as to what they're likely to lend you. Take about 15% off what they think is the maximum they'll lend you and that gives you a good ballpark to start from.
With an idea of the size of mortgage you're after, you can start comparing deals with lenders to whittle the choices down to a deal which you're most likely to take up. You can then get yourself a mortgage agreement in principle and go house shopping!
It's a good idea to write down your combined financial commitments per month and see how much headroom it gives you. You might think your mortgage is affordable now, but play through a few scenarios like rates going up .5% each time and losing one salary. Does this leave you with enough each month to pay the essentials like the mortgage, car bills and utilities? Don't forget the money you'll need to set aside for repairs and home improvements. Does the location of the new house affect your car insurance premiums?
It's also a good idea to get hold of a copy of your credit reports, just to make sure there aren't any nasties on there which will give lenders cold feet.
Beyond the 14k, set aside at least 3k for solicitors, searches, valuations, moving costs, furnishing and decorating. You also want another 2k kept back as an emergency fund should things go a bit pete tong in the first few months.
I would also consider saving a deposit closer to 15-20% if possible, that's where the really juicy interest rate deals become available to you.
justin220 said:
I'd probably go in at 125k and work up.
Although be warned. I offered on a house recently (10% below aaking) and the owner was so disgusted they walked out. Even though they invited us round to negotiate!
If someone gave me an insulting offer then it would be over. Saying that, I don't consider 10% to be insulting, rather somewhere to negotiate from. 15-20% would be a different matter though.Although be warned. I offered on a house recently (10% below aaking) and the owner was so disgusted they walked out. Even though they invited us round to negotiate!
Rustie said:
I dont think i could go lower than 10% as a first offer if dealing with someone personally e.g. buying from the home owner. However buying a repo from the bank is another matter. Go low and see where being stubbern and cheeky gets you.
1. If your first offer doesn't make you wince, it isn't low enough2. The lender involved will have a price in mind, they aren't there to haggle on it. Soemtimes, but not always the agent will know what that level is, and although they might put the offer forward, they'll already know you're not going to be succesful.
3. There is a "chain of command" on repos cases. Agent reports to the repo agent who refer to the mortgage firm that now owns it. That can take days, and no-one moves at speed.
4. Repo bids have to be advertised for a set period (usually in the local paper or via rightmove) The advert will state that an offer has been made which is acceptable to the mortgage firm, but it will invite higher offers.
5. The repo firm can and very occassionally will pull out right up to the point of exchange. They have a legal duty to achieve the best possible price. If you've spent money to get nowhere, that's your lookout.
6. I don't normally advise people to do an AIP, given that in the normal run of things they are rarely worth the paper they are printed on, however you are going to be dealing with a beaurocratic system, with a high LTV so get yourself all lined up beforehand.
How ever bad you think it will be, it will be much worse.
We got a mortgage in principal first. These are valid for 6 months and ensures you can actually borrow, saves wasting anyones time.
View 40+ properties.
Eventually settle on one.
Go through rigmarol of purchasing said property. Wait 6 and a half months. Move into property. Pay bills for eternity.
Its great, I love it now we are in but you will need around £2.5k for fees aswell. £1300 for solicitor, £500 for vaulation, mortgage agreement fee's etc. So 140k will not be enough.
Good luck.
We got a mortgage in principal first. These are valid for 6 months and ensures you can actually borrow, saves wasting anyones time.
View 40+ properties.
Eventually settle on one.
Go through rigmarol of purchasing said property. Wait 6 and a half months. Move into property. Pay bills for eternity.
Its great, I love it now we are in but you will need around £2.5k for fees aswell. £1300 for solicitor, £500 for vaulation, mortgage agreement fee's etc. So 140k will not be enough.
Good luck.
bga said:
If someone gave me an insulting offer then it would be over. Saying that, I don't consider 10% to be insulting, rather somewhere to negotiate from. 15-20% would be a different matter though.
When we first viewed the house, the owner (husband) said he would like close to asking, but would listen to offers.I went back for a second look and told him I was keen. He then phoned me later that day and said if I was going to offer at all, to come round and have a chat and negiotiate.
So I did.
Only difference was his wife was there this time and I'm not sure he had warned her we would come in low. She got up and stormed out in disgust. It was quite surreal. So we left, shook hands on the way out. The annoying thing is, we were willing to go up. Bit of a stalemate now. He has since went to 'fixed price', for whatever difference that makes!
justin220 said:
When we first viewed the house, the owner (husband) said he would like close to asking, but would listen to offers.
I went back for a second look and told him I was keen. He then phoned me later that day and said if I was going to offer at all, to come round and have a chat and negiotiate.
So I did.
Only difference was his wife was there this time and I'm not sure he had warned her we would come in low. She got up and stormed out in disgust. It was quite surreal. So we left, shook hands on the way out. The annoying thing is, we were willing to go up. Bit of a stalemate now. He has since went to 'fixed price', for whatever difference that makes!
I never negotiate with the seller as they more often than not are too emotionally attatched to the property and take it personal. The agent is there to take the flack from the vendor so I use them.I went back for a second look and told him I was keen. He then phoned me later that day and said if I was going to offer at all, to come round and have a chat and negiotiate.
So I did.
Only difference was his wife was there this time and I'm not sure he had warned her we would come in low. She got up and stormed out in disgust. It was quite surreal. So we left, shook hands on the way out. The annoying thing is, we were willing to go up. Bit of a stalemate now. He has since went to 'fixed price', for whatever difference that makes!
Similar position here. GF and I are in the middle of buying our first house. We got an agreement in principle first and then started looking, it made the most sense really.
Be prepared to walk away if the seller won't come to a price you are happy with. Remember you don't want all of your outgoings to be spent on a mortagage each month.
Look at the Post Office for a 90% mortgage. The rates are obviously high, whoever you go with, when it's a 90% mortgage but the service we have had from them is amazing. Great contact and extremely easy to deal with.
Be prepared to walk away if the seller won't come to a price you are happy with. Remember you don't want all of your outgoings to be spent on a mortagage each month.
Look at the Post Office for a 90% mortgage. The rates are obviously high, whoever you go with, when it's a 90% mortgage but the service we have had from them is amazing. Great contact and extremely easy to deal with.
wolf1 said:
I never negotiate with the seller as they more often than not are too emotionally attatched to the property and take it personal. The agent is there to take the flack from the vendor so I use them.
A lot of the online "agents" only allow you to deal with the vendor direct. PITA TBH.I'm in a similar position to you, however i'll be buying the house on my tod.
Nationwide offer a scheme called "save to buy", basically you have to save at least £50 into this account every month for at least 6 months. After 6 months they will offer you a 95% mortgage.
If you have £10k+ in the account then they will also give you £1k cash back if you take out there mortgage.
I have have a month left to wait.
Maybe you could consider this if you're not in a rush to move?
Nationwide offer a scheme called "save to buy", basically you have to save at least £50 into this account every month for at least 6 months. After 6 months they will offer you a 95% mortgage.
If you have £10k+ in the account then they will also give you £1k cash back if you take out there mortgage.
I have have a month left to wait.
Maybe you could consider this if you're not in a rush to move?
justin220 said:
When we first viewed the house, the owner (husband) said he would like close to asking, but would listen to offers.
I went back for a second look and told him I was keen. He then phoned me later that day and said if I was going to offer at all, to come round and have a chat and negiotiate.
So I did.
Only difference was his wife was there this time and I'm not sure he had warned her we would come in low. She got up and stormed out in disgust. It was quite surreal. So we left, shook hands on the way out. The annoying thing is, we were willing to go up. Bit of a stalemate now. He has since went to 'fixed price', for whatever difference that makes!
That does sound rather OTT! If they are like that now then I can only imagine that they would be frustrating to deal with on the journey through exchange and completion. I went back for a second look and told him I was keen. He then phoned me later that day and said if I was going to offer at all, to come round and have a chat and negiotiate.
So I did.
Only difference was his wife was there this time and I'm not sure he had warned her we would come in low. She got up and stormed out in disgust. It was quite surreal. So we left, shook hands on the way out. The annoying thing is, we were willing to go up. Bit of a stalemate now. He has since went to 'fixed price', for whatever difference that makes!
Good luck!
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