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Help! Mortgage! How?
13 Answers
I am wondering whether it will ever be possible for me to buy a property. I am currently saving for a deposit but questioning the value of this as increasingly I am finding that I am priced out of the market.
I don't want anything huge, just a little place of my own. I would settle for nothing more than a poky studio flat or a rough apartment, but in my area these are starting at least at �100,000.
I am currently in training to improve my salary but it is unlikely I will ever earn more than 15-20k as I love my job, underpaid as it is, and would not want to sell my soul to something I hate, no matter how big the pay packet. I have been told this means there is no hope for me when it comes to the property market!
I know I sound a bit fussy (!) but is there any way I could ever afford somewhere in my current situation? I'm not really wanting to consider flatmates. Could I perhaps negotiate lower mortgage payments to fit in with my salary, at a cost of paying it off slower and with more interest? Do lenders do this? Or are there any other ways to get on the property ladder?
Any ideas, thoughts or advice much appreciated.
I don't want anything huge, just a little place of my own. I would settle for nothing more than a poky studio flat or a rough apartment, but in my area these are starting at least at �100,000.
I am currently in training to improve my salary but it is unlikely I will ever earn more than 15-20k as I love my job, underpaid as it is, and would not want to sell my soul to something I hate, no matter how big the pay packet. I have been told this means there is no hope for me when it comes to the property market!
I know I sound a bit fussy (!) but is there any way I could ever afford somewhere in my current situation? I'm not really wanting to consider flatmates. Could I perhaps negotiate lower mortgage payments to fit in with my salary, at a cost of paying it off slower and with more interest? Do lenders do this? Or are there any other ways to get on the property ladder?
Any ideas, thoughts or advice much appreciated.
Answers
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It's not getting the mortgage that's the problem - it's paying it every month.
A �90000 mortgage over 30 years at 5% will cost �487.88, plus all the insurances (building, contents, mortgage repayment insurance in case of sickness/accident) - at least �600 per month before council tax, gas, electricity, phone....
Over 40 years it is �437.08, not much cheaper. If the interest rates went up, so would the mortgage payments. 5% is optimistic too - more likely to be more than this.
Realistically in your current situation, you cannot afford to buy a property in the �100000 bracket.
Have you considered shared ownership via a housing association?
A �90000 mortgage over 30 years at 5% will cost �487.88, plus all the insurances (building, contents, mortgage repayment insurance in case of sickness/accident) - at least �600 per month before council tax, gas, electricity, phone....
Over 40 years it is �437.08, not much cheaper. If the interest rates went up, so would the mortgage payments. 5% is optimistic too - more likely to be more than this.
Realistically in your current situation, you cannot afford to buy a property in the �100000 bracket.
Have you considered shared ownership via a housing association?
You dont have to 'sell your soul' to get a better paid job, you just have to take a realistic view on whether you can live on this salary or not, however much you love the job. It's never black and white - it seems unlikely that this is the only job in the world you could enjoy doing and get paid better.
Other options may be borrowing money off relatives who, maybe, wouldnt want paying back so soon or with interest - though they probably would want paying back eventually.
You could buy with someone else, a partner or friend, short term - not a flatmate but co-owners which would get you on the property ladder.
Or you could perhaps move to a different area where prices are within your means?
Do you have the capacity to do any extra hours in the evenings, weekends etc which might help you save up a larger deposit?
You dont say what your job is, where you live etc which makes it a bit more difficult to give advice.
Other options may be borrowing money off relatives who, maybe, wouldnt want paying back so soon or with interest - though they probably would want paying back eventually.
You could buy with someone else, a partner or friend, short term - not a flatmate but co-owners which would get you on the property ladder.
Or you could perhaps move to a different area where prices are within your means?
Do you have the capacity to do any extra hours in the evenings, weekends etc which might help you save up a larger deposit?
You dont say what your job is, where you live etc which makes it a bit more difficult to give advice.
Would you have a family member who could help you out and who would be prepared to invest in a property as a silent partner, say a quarter share?
I realise this would bring with it other issues for example if they wanted to release their money from the property etc, this you would have to discuss obviously but if possible its worth considering.
I realise this would bring with it other issues for example if they wanted to release their money from the property etc, this you would have to discuss obviously but if possible its worth considering.
Could you have a look into shared ownership? I dont know huge amounts amount this but basically you pay half rent and half mortgage - though be careful as this could work out expensive - however, the point is to help people get on the property ladder who otherwise cant. I know a lot of these places are being built around us in Devon where prices are steep - like everywhere now! Best of luck
I bought under shared ownership last year. But I could only recommend it if you think the initial asking price is low (which I think mine was, so I'm hoping I'll make a profit when I sell to offset the rent I'm paying). It is a bit cheaper than a full mortgage, but not much more (for me it works out about �50 month cheaper on a �100k property) - and you're not making any profit (if there is any in the current climate) on the portion you don't own.
Shared ownership is great if you can't get a mortgage for �100k but believe you can pay it back, otherwise I'd recommend avoiding shared ownership. Unless you are prepared to take in a lodger I can't see that you will be able to buy. It's a horrible situation for all us first time buyers at the moment.
The only positives that might happen in the future are that the housing market could well start to dip because chains grind to a halt with first time buyers being priced out of the market, and the Government is encouraging builders to create more affordable housing.
Keep an eye out for schemes such as Debut (http://www.debutbyredrow.co.uk/) - one of my friends got a flat for �55k two years ago. It's little more than a bedsit but it's a first step on the ladder and fingers crossed more house builders will follow Redrow's lead and build more of these homes.
Good luck!
Shared ownership is great if you can't get a mortgage for �100k but believe you can pay it back, otherwise I'd recommend avoiding shared ownership. Unless you are prepared to take in a lodger I can't see that you will be able to buy. It's a horrible situation for all us first time buyers at the moment.
The only positives that might happen in the future are that the housing market could well start to dip because chains grind to a halt with first time buyers being priced out of the market, and the Government is encouraging builders to create more affordable housing.
Keep an eye out for schemes such as Debut (http://www.debutbyredrow.co.uk/) - one of my friends got a flat for �55k two years ago. It's little more than a bedsit but it's a first step on the ladder and fingers crossed more house builders will follow Redrow's lead and build more of these homes.
Good luck!
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You could try and get a good deal on an off-plan new build where you get the property cheaper and hence don't need such a big mortgage.
You might need to wait a while until it's built but you could use that time to save up some money to reduce the overall mortgage you would need to get.
Many let you exchange on a lower deposit and try and get exchange conditional on getting a satisfactory mortgage offer.
Some developers also do deals such as stamp duty and legals paid, no sdlt payable in your budget so you may be able to negotiate other incentives to save you some money.
Get a good independant broker to go through your finance options.
The other way I could think of is a below market value one such as from a mortgage lender who is selling a repossessed property.
If affordable you could get a low percentage bridging finance to purchase, remortgage for value and release some of the equity. Very few lenders will do this though and you would need a solicitor who knows what they're doing.
What area are you in?
You might need to wait a while until it's built but you could use that time to save up some money to reduce the overall mortgage you would need to get.
Many let you exchange on a lower deposit and try and get exchange conditional on getting a satisfactory mortgage offer.
Some developers also do deals such as stamp duty and legals paid, no sdlt payable in your budget so you may be able to negotiate other incentives to save you some money.
Get a good independant broker to go through your finance options.
The other way I could think of is a below market value one such as from a mortgage lender who is selling a repossessed property.
If affordable you could get a low percentage bridging finance to purchase, remortgage for value and release some of the equity. Very few lenders will do this though and you would need a solicitor who knows what they're doing.
What area are you in?
Some links you may find useful...
http://www.newhomes.co.uk/buyingoff.aspx
http://www.debutbyredrow.co.uk/
http://www.newhomes.co.uk/buyingoff.aspx
http://www.debutbyredrow.co.uk/
Hi,
Its worth it to browse repossessed homes too.
Take a peep.....i know theres a small registration fee, but it may save you thousands!!!
http://www.auctionpropertyforsale.co.uk/repo/d efault.htm
Its worth it to browse repossessed homes too.
Take a peep.....i know theres a small registration fee, but it may save you thousands!!!
http://www.auctionpropertyforsale.co.uk/repo/d efault.htm
If you live in certain areas of Scotland you would qualify for a grant from Homestake. Thay were set up by the Scottish excutive to help first time buyers onto the proerty ladder. The only criteris is that you must be a first time buyer and earn less than�19500 pa. Just type Homestake in your search engine. Thay gave me a grant of 30k and even though I had a deposit of 50k my wages were so low I couldny get any decent amount of mortgage that i could afford to pay. The property is yours, not shared, all they ask for is the same perecntage back when you sell, whether the value goes up or down!! Sounds too good to be true, which is why the Scottish Exec dont tell too many people about it. But its a fantastic scheme, worked for me, I have a lovely flat now.
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