Im finally hating my house that I moved into in Bristol.
Its sodding freezing, it uses leccy heaters which constantly break down, and despite the landlord being really nice, and happy to come out all the time and fix them, its getting a bit of a pain in the arse.
I want my own place, with gas central heating :)
So... was considering moving in the summer, to another rented place, but im looking at rental prices £525+ and thinking christ... I could have a mortgage for that, and actually own a place.
So people... I want help, how in the hell does a man go about getting his first house?
What kinda Mortgage should I go for, for a bog standard simple nice easy repayment structure (already been advised to stay away from fixed as the interest rate is so high at the moment its pointless). I earn £23k prior to tax.
What sort of size budget should that get me?
Ideally I want mortgage repayments to be around the £500 - £600 mark for 25 - 30 years.
Any decent mortgage providers out there kind to first time buyers? and by kind I dont mean "YES! YOU CAN HAVE A MORTGAGE OF 500,000!" I mean someone who will actually fit a mortgage to my needs.
I have no deposit at present, nothing... and unlikely to be able to save, so would be looking at a 100% mortgage I think.. (if thats the right terminology).
in this day and age you need a deposit, and youre only going to be able to get 3.5 x your annual salary at a decent interest rate. go to your local mortgage broker and ask for some legally regulated advice, and ignore what everyone on here tells you.
Quote from: Maldonadoin this day and age you need a deposit, and youre only going to be able to get 3.5 x your annual salary at a decent interest rate. go to your local mortgage broker and ask for some legally regulated advice, and ignore what everyone on here tells you.
Cool... so its a necessity to save :( Dammit... seems itll be several years before I can afford to do that then :(
edit: Yeah, if you dont have a deposit the bank will laugh and escort you off the premises.
moneysavingexpert.com is a good place to look for mortgages and stuff.
Im in the same boat, except Ive refused to chuck money on a rented place. Im looking at buying a flat in the summer but down here its either £100k straight for a 1 bed flat or a 30-60k part buy deal. The part buy looks like a viable option to get on the ladder.
I did the maths and I worked out Id need a minimum of 22k earnings to get a mortgage for a part-buy - Ive stopped contracting and started looking for a ft job but borrowing £100k+ for a whole 1bed flat is out the question.
My one concern is prices are dropping - I dont want to drop a tonne of money on something while thats still the case.
So yeah, look into part-buys but look at the local market carefully and make note of trends.
Yes you really do need to save.
Im renting until I have enough for a deposit, at the moment my townhouse is bloody amazing for the money though, so Im in no rush at all given the market.
basically if youve not started saving or havent got the bravery to take massive financial risks you wont be buying. Buying right now would probably be a very bad idea anyway as theres a good chance youll find yourself in negative equity
forgetting about falling prices, interest rates etc.. for the moment...
if you buy a new house, theres lots of companies that will pay the deposit for you (basically add 10% to the price tag then give it back etc...)
theres other ways to do this too, but this is the easiest ;)
Wait a little while. The 100 year mortgage is on the way...
Quote from: M3ta7h3adI earn £23k prior to tax.
Unless you can find something in the area for about 70-80K then forget it. Plus you would need a really nice fairy godmother lender, and there just arent any. Look whats happened to Northern Rock. We were damn lucky to get a five bedroom house for about that in 02 while the flat next door is now up for sale- just under £90K...
You might be able to part buy, or, if you intend to stay in one place for a long time, look into renting and then using Right to Buy.( I think its called that)
As for the heaters, go and buy an emergency electric one and have a look at getting the place insulated rather better than it is, there may be grants available for your landlord.
Quote from: knightyforgetting about falling prices, interest rates etc.. for the moment...
if you buy a new house, theres lots of companies that will pay the deposit for you (basically add 10% to the price tag then give it back etc...)
theres other ways to do this too, but this is the easiest ;)
Unless hes on 40-50k+ thats not really going to be an option for him in a city centre. 3x income is going to be his limit as a first time buyer with no deposit.
If you really wanted to do it you can take a 10-12k graduate loan to pay the deposit of a buy to let, use the rental income to guarantee the payments and then sort the money yourself under a resident landlord contract. Youd be mad to do it in this climate but it is doable. I did my first house that way and did well out of it but it could have gone VERY wrong if house prices went down.
On 23k you realistically cant buy a house for more than 90k which severely limits your options. If your parents earn significantly more and are willing to guarantee you on their income then you could spend more by going with someone like bank of irelands guarantor mortgages. Dont knwo your circumstances but you more or less need a parent without a mortgage, earning over 60k and not be within 5 years of retirement age for it to be worthwhile. If theyre on 80k+ then they can get away with a small %age of their house mortgaged and still help as long as they have a pension fund. I think its also possible to do it by your parents remortgaging but anyone who asks their parents to do something like that is having a giraffe tbh
Your mortgage (if you did choose to get one) would be significantly more than 600 a month youre paying in rent. And the difference between 600 and 800 is a lot more than 400-600. Without some very clever dealing youre probably better off renting and putting the difference in a high interest account. Really, noone should be trying to buy UK property this close to christmas as theres a scarily high chance that property market outside of London may nose dive. If it carries on how it has done in the last few months when we get to March time then the market has crashed. Noone will know for 2-3 months tho.
600 a month mortgage for 25-30 years you are looking at about a 90k house. Thats not a lot these days.
Quote from: SeriousLook whats happened to Northern Rock. We were damn lucky to get a five bedroom house for about that in 02 while the flat next door is now up for sale- just under £90K...
lnmaop
I bought my first place in september! its not actually that hard really. I got a 100% mortgage on £101k and pay £560/month for a 1bed flat.
Go and do it really mate!
Quote from: chrisdickoI bought my first place in september! its not actually that hard really. I got a 100% mortgage on £101k and pay £560/month for a 1bed flat.
Go and do it really mate!
I dont know what its like in your part of Yorkshire but from where Im living and what SteveF said, given what hes paying he should be able to do much better from renting.
That sounds stupidly expensive for a 1 bedroom flat, Im paying almost £100pcm less than you and I have 3 bedrooms and 2 bathrooms!
Thats whitby for you. The flat below me is going for £130k!
you cant really compare across cities unfortunately. You cant pick up a bedsit around here for much under 250k and youre really looking at 400k+ for a reasonable 1 bed flat. :(
Buying a property right now, regardless of price is incredibly risky since the market is falling, interest rates are a mess and the US could well have a recession. If anything, selling might be the smartest move.
Risky in what sense mate?
Negative Equity
http://en.wikipedia.org/wiki/Negative_equity
Its looking like it may happen again and its a horrible situation to be in. The people whore most susceptible are people with >85% mortgages because as soon as house prices start dropping theyre instantly in more debt than the bank repossesing their house can cover. When it happens you basically cant sell without finding thousands of pounds to pay off the difference in your mortgage, you cant just have your home repossesed and walk away because the house isnt worth enough to cover the debt, etc.
House prices took a big hit before christmas on the back of the sub prime mortgage problems and rising interest rates. If they keep dropping here then a huge number of people here who bought with less than 10% deposits will be stuck unable to move without very expensive bridging loans or simply have their homes reposessed and still owe tens of thousands. Its happening all over the US which is why theyre slashing interest rates. The bank of england wants the housing market to cool so they wont be slashing interest rates here if the same happens.
Its happened here before and most of the banks and big companies are dumping property they use on the market and then renting it back from the buyers. Thats a good sign that they think property is going to drop a lot. Demand in the south east is high enough that it may survive but the big growth areas outside the capital are a risky option right now.
House prices wont fall anytime soon.
Theres to much demand from the influx coming in.
They may fluctuate a little, but I really cant see them dropping anymore than 2%-3%.
Price is driven by demand, so when they start to drop, people will start to buy.. people buying will then push the prices back up.
Anyway, £23k = mortgage of about £85k at a push.
Repayments on that would be around the £500-£600 mark.
Your pretty much looking at a Flat at best.
Quote from: EggtasticoHouse prices wont fall anytime soon.
Theres to much demand from the influx coming in.
They may fluctuate a little, but I really cant see them dropping anymore than 2%-3%.
Price is driven by demand, so when they start to drop, people will start to buy.. people buying will then push the prices back up.
Maybe in some areas, but where I live houses are being discounted like mad. Talking to the estate agent the other day they are having issues shifting stuff as people are just refusing to pay. When you think that the average price round me for a 3 bed terrace is 100k it seems strange to people from outside the area.
QuoteAnyway, £23k = mortgage of about £85k at a push.
Repayments on that would be around the £500-£600 mark.
Your pretty much looking at a Flat at best.
Depends on location, 83k for me would mean a 2 bed turn of the century terrace.
I bought a flat in August, £206k in London. Well outer London.
I think you need to look at where you want to buy and see how the market is.
London and other cities/towns should be able to survive the recent price drops ok as long as nothing else comes along to deepen the crisis. It depends entirely on where you want to live as to the degree of risk when buying right now.
For me, buying now would be off the agenda regardless of local market conditions.
To get my first place I took out a loan from the bank.
Use that cash to pay the depost, so that I had a lower repayment option,
then I had my mortage and load to repay, but now the load is repaid I am on a good deal.
But only consider this if you can afford both a loan & mortage - it will save you money on the morthage if you dont have any savings.
Quote from: EggtasticoHouse prices wont fall anytime soon.
Theres to much demand from the influx coming in.
They may fluctuate a little, but I really cant see them dropping anymore than 2%-3%.
Price is driven by demand, so when they start to drop, people will start to buy.. people buying will then push the prices back up.
Im not taking a view on this tbh.. as there are many factors that can affect the housing market but it is still perfectly feasible for house prices to drop significantly even with lots of demand for housing - if there are no buyers available at a particular price level then they pretty much have to drop else the market will become stagnant.
As far as Im concerned Im pretty happy renting, the rent I pay in my current place is cheaper than the interest alone would be on a mortgage so I am saving money by renting.
As for the OP Id say just make sure you shop around - check the price comparison sites, go to a broker and check what price youd get from your bank if youve got a graduate account with them (dont know if they are any good but HSBC keep trying to offer me a cheap mortgage that they apparently offer to grads.). Make sure you do your own research and bear in mind that any from of financial advisor/mortgage broker type you deal with is primarily a salesman and there are plenty of conflicts of interest that go with that.
Im not sure which way it would go but I think believeing were only looking at 2-3% correction is so naive its kind of astounding. If the housing market is correcting (which is how it looked before xmas) then it could very easily correct in line with income. Thatd be 10 times that amount.
Banks currently arent falling over themselves to give mortgages so even with high demand they cant pay the price. The houses wouldnt stand empty but they could very easily drop in value 20% nationwide and still be at the extremes of what banks are willing to lend people.
Its not a lack of demand that could kill the prices - its 3 main things plus a ton of little ones:
* banks being cautious about any sub prime candidates for mortgages (i.e. 100% mortgages) - which they are as of the sub prime trouble
* if houses are too expensive compared to income (normally considered 3-4 times income) - which they are well in excess of
* economic problems globally meaning pension funds and investments wont mature to pay off existing mortgages - the US is on the verge of a major slump which could become a minor recession.
Until before xmas only the second was true and that meant they could just climb artifically high. As of September all 3 are true and houses dropped in price big time. The christmas holiday lul has been a blessing since it means noone knows if were in the middle of a crash or not. Its not speculation, house prices were tumbling before xmas. Hopefully itll be passing but if the US gets a recession or major slump...
I sold, totally removed all UK property investment and Im renting again.
on a total side note... when I was in the USA about this time last year, house prices in Philadelphia had dropped 50% in a year :o
I was pretty shocked that I hadnt heard anything about it before that :o
Quote from: SteveFNegative Equity
http://en.wikipedia.org/wiki/Negative_equity
Its looking like it may happen again and its a horrible situation to be in. The people whore most susceptible are people with >85% mortgages because as soon as house prices start dropping theyre instantly in more debt than the bank repossesing their house can cover. When it happens you basically cant sell without finding thousands of pounds to pay off the difference in your mortgage, you cant just have your home repossesed and walk away because the house isnt worth enough to cover the debt, etc.
House prices took a big hit before christmas on the back of the sub prime mortgage problems and rising interest rates. If they keep dropping here then a huge number of people here who bought with less than 10% deposits will be stuck unable to move without very expensive bridging loans or simply have their homes reposessed and still owe tens of thousands. Its happening all over the US which is why theyre slashing interest rates. The bank of england wants the housing market to cool so they wont be slashing interest rates here if the same happens.
Its happened here before and most of the banks and big companies are dumping property they use on the market and then renting it back from the buyers. Thats a good sign that they think property is going to drop a lot. Demand in the south east is high enough that it may survive but the big growth areas outside the capital are a risky option right now.
Which is why my estimate of the amount he might be able to borrow is so much smaller than yours. The BoE and US Treasury have pushed a huge wodge of money into the loans market to ease the pressure the banks have created, which is why we are finally seeing some movement from them. This is a pretty much unique situation with them bailing out the market rather than risk a disaster.
Prices are expected to be going down, a little on average. Hopefully it will not be as bad as expected. Some Estate agencies are telling people to consider offers, any reasonable offers.
Quote from: BeakerQuote from: EggtasticoHouse prices wont fall anytime soon.
Theres to much demand from the influx coming in.
They may fluctuate a little, but I really cant see them dropping anymore than 2%-3%.
Price is driven by demand, so when they start to drop, people will start to buy.. people buying will then push the prices back up.
Maybe in some areas, but where I live houses are being discounted like mad. Talking to the estate agent the other day they are having issues shifting stuff as people are just refusing to pay. When you think that the average price round me for a 3 bed terrace is 100k it seems strange to people from outside the area.
QuoteAnyway, £23k = mortgage of about £85k at a push.
Repayments on that would be around the £500-£600 mark.
Your pretty much looking at a Flat at best.
Depends on location, 83k for me would mean a 2 bed turn of the century terrace.
Same deal where im looking.
There are some mid-terrace 2/3bed properties in Gloucester/Cheltenham which are going for 90k... some upto 120k (possible on a guarantor mortgage).
It isnt to buy a property around christmas, im not thinking about doing this until the summer, but I just wanted to see what Id need to get the ball rolling.
Id sit on it a while. We saw the greatest rises over here in Northern Ireland, and they are now starting to tail off and downturn. Loads of the me-too greedy investors and developers are starting to feel the pinch, and range rovers are going back to dealers showrooms left right and centre :)
You cant maintain a market with prices starting at £250,000 in a population where the average salary is about 23-25k.
Its ridiculous - I earn over 50k pa and I wouldnt be able to afford to mortgage a decent house on my own in the current climate.
It is amusing walking past the estate agents nowadays - theyre literally begging first time buyers to prop up their business. The same FTBs they were very quick to snub when all the greedy investors were buying up everything and keeping them in commission.
I still dont think theres going to be a collapse like people think.
If anything, property had always been cheap (when you think about it & compare it to prices on other things like cars, boats, holidays, etc) up until the current boom.
I do think prices have peaked (& prob over valued), but I dont see a crash where prices are likely to fall by as much as people think.
At the moment in lower valued areas, Investors arent interested because theres no/little return.
When you could buy a 2 bedroom+ house for £50k 5+ years ago, they was getting snapped up. Loads of people jumped on the bandwagon for a 2nd income.
Mortgage on £50k would be around £300 a month?
Rental = £80 a week minimum = £4200 a year approx. Mortgage = £3600
So theres £600 a year profit, which will get eaten up in maintainance anyway..
Now your looking at £85k
Thats a morgage of £550 a month £6600 a year
Your already down £3000 a year.
If they drop, then the buy to let market will open back up & push the prices up again. If they stay to high, then people just wont bother moving.
The problem isnt 85k houses lol
The problem is for a lot of places houses at tha price point simply dont exist anymore. There are actually car park spaces going for significantly more than 85k now lol.
Quote from: SteveFThe problem isnt 85k houses lol
The problem is for a lot of places houses at tha price point simply dont exist anymore. There are actually car park spaces going for significantly more than 85k now lol.
not everywhere in the UK & simple fact is, if you cant afford to live in the area.. MOVE.
I was just using the £85k as an example - along with £80 a week rent - as that is what you can get by renting via the council.
Its the best market to aim for TBH as the every council has a housing list, so your guaranteed rental. 2nd best is prob student places, but they will have hire maintainance cos they are messy greasy f**kers.
Also, its worth pointing out that most couple now both work. Gone are the days of the old man going out to work & the women being housewifes.
Myself and the missus came very close to buying a house about six months ago, but having to move to a new county plus me not having a steady job at the time stopped us.
We were offered 100% mortgages from most places we went to. The missus is an NQT Teacher, so on the lowest salary possibly and Im on minimum wage - yet we were offered 110k 100% mortgages all over the place.
Weve since decided to save a couple of grand, its better to have a 3k deposit than nothing at all.
At the moment you are best renting. I sold my house to rent.