Buying My First Home

[Sochaux]

Hey

I’m at the stage in my life where I’m looking to get myself on the property ladder and as I’m abit out of my depth here, I’m not sure what I can and can’t afford.

I’m 22 year old and take home £1,740 a month, the only outgoings each month are £157 for my PCH, £138 for insurance and £20 for my phone contract.

I have about £17,000 in savings at the moment but adding to that each month.

Realistically what sort of mortgage would I be able to get and afford each month?

Please let me know if you need any more info and thanks in advance!

Edited by Sochaux on Monday 20th August 13:06

[sc0tt]

Halifax say between 97k and 110k having a quick look at their online calculator

[YaMom]

Have you had a play with some of the mortgage tools? Like this one from Santander

[Wacky Racer]

Firstly, well done for getting that deposit together, not an easy thing to do.

There are too many variables, I'm pretty sure most lenders have information about mortgage repayments for a given sum, my advice would be

a) Don't overstretch yourself

b) Buy a house that will be easy to sell on when you want to upgrade.

c) Consider stuff like car parking, proximity to shops, bus stops etc.

All pretty obvious really. Take your time, you are in a strong position as a first time buyer with no chain.

Good luck

[Sochaux]

Thanks for all your replies.

For peace of mind I’m mostly interested in a new build and I could then look at the HTB scheme.

I’m more interested in knowing what monthly outgoings property ownership entails.

I’ve looked at the calculators and putting down a 10% deposit on a £150,000 house mortgage will be approx. £600-£700 per month.

[Simpo Two]

Sochaux said:

I’m more interested in knowing what monthly outgoings property ownership entails.

Mortgage
Council Tax
Gas/Electricity
Water
TV licence
Broadband


Nice work at only 22, well done! You'll have IFAs on your tail next

[CharlieH89]

Sochaux said:

Thanks for all your replies.

For peace of mind I’m mostly interested in a new build and I could then look at the HTB scheme.

I’m more interested in knowing what monthly outgoings property ownership entails.

I’ve looked at the calculators and putting down a 10% deposit on a £150,000 house mortgage will be approx. £600-£700 per month.

On a £20k salary you are looking around £100k plus your £17k.

Conveyancy fees are roughly £1200 and surveys can be £400-1000.

When you are in your house;
Council tax £135 a month, sole occupant take away 25%
Gas and electricity £40-70
Water £30
TV/ Internet £30-90
House insurance £20

So that'll be around £700 of your wage gone. Try and get a friend to live with you and pay some of your mortgage.
Whilst getting a house when you are 22 is a great future investment it'll leave you with less money per month for social activities unless you do get someone to live with you.

[Simpo Two]

CharlieH89 said:

Try and get a friend to live with you and pay some of your mortgage.
Whilst getting a house when you are 22 is a great future investment it'll leave you with less money per month for social activities unless you do get someone to live with you.

That's a fair point. When I bought my first house I worked for a big company that was always employing people. I contacted Personnel (the days before 'HR' so they were competent and helpful) and they sent me a lodger, then another for the third bedroom

[Sochaux]

I’m not on £20,000, I earn just under £30,000 p/a but take home £1,740 after tax and NI.

I’ve also read up on the government rent a room scheme which sounds like something I could do!

I’m going to work it all out later to check what my monthly out goings would be but it seems like it’d be too tight.

Edited by Sochaux on Monday 20th August 06:47

[Jimmy Recard]

Are any of those savings in a Help to Buy ISA or Lifetime ISA?

If not, get one set up

[BMR]

Jimmy Recard said:

Are any of those savings in a Help to Buy ISA or Lifetime ISA?

If not, get one set up

Agreed with this, I had a Help to Buy ISA. between that and the cashback on the mortgage deal I effectively didn’t pay a penny for the conveyancer.

ETA I’m also roughly on same take home as OP, I took my mortgage over 22 years so payments are a little higher than ideal but it saved a whack of interest when my adviser went through the figures. Ideally if like them to be £100 less a month. 10% deposit was also loads better as the mortgage company then offers you better rates.. But I am living with my fiancée so she pays her share of household costs so that makes it a lot easier on me financially.

Edited by BMR on Monday 20th August 07:29

[S9JTO]

Open a Lifetime ISA, free 25% Government bonus on your contributions (max £4k p/a). The only catch is you have to have it open for at least 12 months and can only use it towards your first home, otherwise you have to keep it until retirement (or lose your bonus).

Both of which don't seem like a problem in your situation. You're in a very similar situation to myself, I'm also 22 and have had a LISA for 5 months now. However, I'm not looking to move out for a few years yet.

[Sochaux]

S9JTO said:

Open a Lifetime ISA, free 25% Government bonus on your contributions (max £4k p/a). The only catch is you have to have it open for at least 12 months and can only use it towards your first home, otherwise you have to keep it until retirement (or lose your bonus).

Both of which don't seem like a problem in your situation. You're in a very similar situation to myself, I'm also 22 and have had a LISA for 5 months now. However, I'm not looking to move out for a few years yet.

I was looking to potentially move out within 6 months, so I assume a HTP ISA would probably be best? I’ll have a read up about them later on.

[S9JTO]

Sochaux said:

I was looking to potentially move out within 6 months, so I assume a HTP ISA would probably be best? I’ll have a read up about them later on.

Yeah if you're looking to move out within the next few months then that'd make sense.

[Sochaux]

Just set up a HTP ISA, wish I did this along time ago.

Now I’m going to wait for reasonably price new builds to be built

[CharlieH89]

Sochaux said:

I’m not on £20,000, I earn just under £30,000 p/a but take home £1,740 after tax and NI.

Edited by Sochaux on Monday 20th August 06:47

Sorry about that I quickly googled £1700 after tax and then just took £20,000 as the first number

[soupdragon1]

Sochaux said:

Hey

I’m at the stage in my life where I’m looking to get myself on the property ladder and as I’m abit out of my depth here, I’m not sure what I can and can’t afford.

I’m 22 year old and take home £1,740 a month, the only outgoings each month are £157 for my PCH, £131 for insurance and £20 for my phone contract.

I have about £17,000 in savings at the moment but adding to that each month.

Realistically what sort of mortgage would I be able to get and afford each month?

Please let me know if you need any more info and thanks in advance!

22 and £30k salary. That's a great start. Looking to get on the property ladder is a smart move at your age. One thing I would say, is also ensure you are on the pension ladder too. You may be already but look into it - and ensure you are maximising any employer contributions that may or may not be available.

When you crunch the numbers (solely looking at a pension and a house as long term investments) then at this moment in time, if you've got any half decent employer contributions, that's a better return on investment than any property.

Of course, if getting your own home is more important than the actual financial decision, then you may look at it differently. The pension part is worth giving some thought to though, especially at your age and on a good salary for your age too. I can't see any dramatic uplift in house prices over the next couple of years, so property isn't really the race against time that it used to be for a 1st time buyer.

If you can manage to do both however (make pension savings as well as get a property) then that will be a great position for you. Just don't overstretch on the mortgage. With low interest rates - taking one over 30 years to start with and then tweaking up after you get settled and a good feel for where you are financially is something you can consider too.

Edited by soupdragon1 on Monday 20th August 11:27

[Jimmy Recard]

Sochaux said:

Just set up a HTP ISA, wish I did this along time ago.

Now I’m going to wait for reasonably price new builds to be built

Is it the case that you can put a grand in in the first month?
If so, do that and then put £200 in on the 1st of every month. You should have something like £2200+interest in six months and you’ll get 25% of all that as a bonus when you buy the house

ETA: looks like it’s actually £1200 in the first month. Even better!

Edited by Jimmy Recard on Monday 20th August 12:33

[Sochaux]

soupdragon1 said:

22 and £30k salary. That's a great start. Looking to get on the property ladder is a smart move at your age. One thing I would say, is also ensure you are on the pension ladder too. You may be already but look into it - and ensure you are maximising any employer contributions that may or may not be available.

When you crunch the numbers (solely looking at a pension and a house as long term investments) then at this moment in time, if you've got any half decent employer contributions, that's a better return on investment than any property.

Of course, if getting your own home is more important than the actual financial decision, then you may look at it differently. The pension part is worth giving some thought to though, especially at your age and on a good salary for your age too. I can't see any dramatic uplift in house prices over the next couple of years, so property isn't really the race against time that it used to be for a 1st time buyer.

If you can manage to do both however (make pension savings as well as get a property) then that will be a great position for you. Just don't overstretch on the mortgage. With low interest rates - taking one over 30 years to start with and then tweaking up after you get settled and a good feel for where you are financially is something you can consider too.

I do have the work place pension but it's minimal, something like 1 or 2%, for now I'm happy with that as getting a property is more important for me as I don't want to plan that far into the future when my life hasn't started yet.

The average property price where I'm from is around £150,000 for 2 bedrooms, so 10% deposit and £135,000 mortgage over 30 years with Barclays is £522 fixed for 5 years and then £640 thereafter, which I think is reasonable.

[Sochaux]

Jimmy Recard said:

Is it the case that you can put a grand in in the first month?
If so, do that and then put £200 in on the 1st of every month. You should have something like £2200+interest in six months and you’ll get 25% of all that as a bonus when you buy the house

ETA: looks like it’s actually £1200 in the first month. Even better!

I set it up with £1,200 initially and I'll put £200 in each month which will help!

I've had a read through it and the Government bonus (which should be around £500/£600 for me) doesn't contribute to the 10% deposit, it is reduced from the mortgage rate.