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Support thread for deposit savers

(21 Posts)
Notyetthere Sat 13-Oct-12 21:31:04

I thought as support threads were popping up recently, i would start one that affects some of us.

I am saving for a deposit to start home hunting hopefully summer 2013. I will be buying with my boyfriend and hopefully it will be a home we can stay in for at least 10yrs. I have a feeling that we are in a market that is not going to rise anytime soon hence we can't buy a home that we hope to sell and collect equity in 3-5 yrs like the old times. Basically we don't want to move out of our home before we have even moved in!

We are aiming for 10% deposit and hope our repayments will be under £1k. We have been saving for about 16months and are 68% there.

Xmas season is here which is I believe a nightmare time for savers!

Good luck to all deposit savers and hope your efforts pay off.

VintageRainBoots Sun 14-Oct-12 07:24:32

Congratulations on your savings! It looks like you're doing great.

We've been saving for a home for a few years now, too. However, until now, Hubby didn't have much job security, so it didn't make any sense to buy a home. Now that his job is more secure, we're keen to buy a place as soon as possible.

One particular issue that might be unique to us is that we're not UK citizens, we're Americans, which means we have to establish UK credit before we can apply for a mortgage (Hubby and I both have great credit in the US, not that that means anything in the UK). In the meantime, he and I are trying to build up our deposit (downpayment?) and not spend it, which is hard to do when you're moving to a new country!

If you don't mind me asking, where do you keep your savings? That is, is your deposit at a particular bank (e.g., HSBC)? Is it in cash, or in certificates of deposit, or invested in the stock market? Do you have a good interest rate?

Sorry to ask so many questions---and I hope you don't feel that they're improper---but I'm wondering how Hubby and I can maximize our savings until the time comes to buy a house. Right now, our bank (located in the US) is paying less than 1% interest, which is less than the current rate of inflation! If we can find a way to earn more interest on our deposit, we would love that.

wendybird77 Sun 14-Oct-12 07:54:00

Vintage - Do you have a UK bank account yet? My highest savings rate is with First Direct 8% on my regular saver (can only save up to £300/ month). The rest is stashed in the highest rate ISA I could find at the time (3% or so). A good place to check out current savings rates is www.moneysavingexpert.com there is a regularly updated guide there under the Savings section.

As a fellow American I can tell you it will be about 3 years though before you can build up sufficient credit history to get a decent mortgage. It is frustrating that none of your history counts, but unless you are a very high earner you are treated like a teen just learning to manage money! I suppose it is the same for anyone immigrating to the US as well. Good luck!

VintageRainBoots Sun 14-Oct-12 09:17:37

Thanks for the quick reply!

We have an HSBC account, opened recently in the US (before that, we used Bank of America). We had read that it could be transferred to a UK account once we're settled in the UK (Guildford). We also have an AmEx card, which we heard can be converted to a UK card and subsequently reported to the UK credit agencies. We've had it for years and it has a very high credit limit; it would be great for our UK credit scores if we can get it on our UK credit report.

Does it really take ~3 years to establish credit in the UK? That seems like such a long time. We were really hoping to buy a house within the first year or so of moving to the UK.

Off-topic, but what is considered a good deposit (downpayment) on a house in the UK? We've been saving for a while; at least by US standards, we have a respectable sum saved.

Feel free to correct me if I've misunderstood any information! I'm still learning everything.

KatoPotato Sun 14-Oct-12 09:26:43

Hi guys, we've been saving for 6 years now, by buying premium bonds, and now finally hurrah hurrah have decided to take the plunge after saving what equals 25% deposit on a three bed in east Dunbartonshire!

Mum2Fergus Sun 14-Oct-12 09:39:14

Oooh, can I join please?! Im on the last stretch of my savings journey, but its proving to be the most difficult! Christmas on its approach, and car expenses too sad but need to crack in as the area Im interested in has 2 new developments that have just gone onsite! Not sure if my %age to target, need to log on to laptop for that. I have used maximum allowed in a cash ISA, rest is just in savings ac which I will sweep over when new tax year allowance is added, April I think. I also have some shares, approx 2k that I will sell nearer the time.

Till now, Ive been putting away what I had left at the end of each month. For last stretch I intend to put set amount away on payday instead and manage on what I have left. Will look into regular savings ac for that.

Someone asked what is acceptable deposit...as a rule its minimum of 10% of purchase price, payable when you exchange. You'll get a better mortgage rate the bigger deposit you have. Most new builds also qualify for government backed schemes that require 5% deposit.

Ive become an avid tracker if my finance forecast spreadsheet lol

Mum2Fergus Sun 14-Oct-12 09:50:39

Premium bonds...how do they work KP? Is it worthwhile sweeping everything there for final months of saving?

Mum2Fergus Sun 14-Oct-12 09:57:18

And congrats KP! How exciting!! We are renting in Fife but looking to move other side of Forth Rd Bridge to cut down on commutes.

Notyetthere Sun 14-Oct-12 19:32:31

Hi All, welcome to the thread. Sorry for the delayed reply, been at work.

I have my savings in Isas for this year and past years. I also have a 6% regular saver with HSBC.

Notyetthere Sun 14-Oct-12 19:40:56

Congs KP! We are all aiming to get to the point of buying. Please do keep us updated with your buying experience.

Mum2Fergus Sun 14-Oct-12 19:43:06

Hi NotYet...great idea for thread, thank you! Im extra incentivised tonight as I visited another development which has the showhouse if the one Im interested in albeit in a different area. We were routing about it for ages lol just about know where furniture will go, and currently planning my colour schemes...talk about getting ahead of yourself lol smile

Want2bSupermum Sun 14-Oct-12 20:05:35

Vintage I relocated from the UK to the US and Amex transferred over my membership with the same limits and my credit score was 725 after that happened. Call the US and get them to start the process as I found their customer service to be better than the UK.

VintageRainBoots Sun 14-Oct-12 20:25:15

Supermum: Thanks for the info. That's what we had heard about AmEx, too. I'm happy to hear that it worked out so well for you. We're hoping it works for us, too.

Yes, what are these "premium bonds"?

Mum2Fergus Sun 14-Oct-12 20:34:55

Hi Boots, I googled PBs earlier...I think I'll stick to my existing savings acs. I think you'll benefit more if like other poster its a long term saving plan you have, but Im hoping to be done and dusted in around 6 months.

KatoPotato Sun 14-Oct-12 20:36:15

Hey guys. Premium bonds were my FIL's idea, As i understnad it they aresimply a savings account you can put money into (and take it out when you want), where the interest paid is decided by a monthly prize draw. You can win between £25 and £1 million, tax-free. (Only ever won more than £25 twice in six years!) but you just set it up monthly standing order.

We were very fortunate that inlaws have gifted us an extra £10k when we reached the £30 limit to take us to a nice 25% deposit figure

We've met with an independent broker to advise us but we've already viewed a house we've both fallen in love with! Going to speak to EA tomorrow! Eeek

Mum2Fergus Sun 14-Oct-12 20:48:19

Excited for you KP!! Ive been a steadfast renter since I was 18, by choice...could have easily bought precrash but it just was never important to me. Both DP and I in well paid jobs so fortunately deposit hasnt/wont take too long. Its only since DS was born Ive yearned for something more permanent grin

KatoPotato Sun 14-Oct-12 22:38:03

M2F, we were the same, but now DS is 2.5 I'm very aware of his future and what space we now need! We're currently renting a two up two down with DH working from our tiny bedroom and our kitchen having only two functional cupboards!!

Been quoted from a solicitor for fees but need to shop around because they've quoted £1,200 based on a sale of £165k? But no fees for offers or notes of interest? Anyone know a good way to know what rate is right?

Want2bSupermum Mon 15-Oct-12 15:10:47

KP - Solicitor fees are between 1000-1500 regardless of the sales price. The work involved is the same hence the cost is similiar. I always go with the solicitor that the EA likes to work with as long as the price falls within that range. The EA has a longer term relationship with the solicitor and can call on the solicitor for a favour whereas you don't have that leverage.

Want2bSupermum Mon 15-Oct-12 15:12:02

I would invest in ISA's and once they are maxed out do premium bonds. Even if you win the minimum prize once every two years it is the same interest you would get at the bank.

Notyetthere Mon 15-Oct-12 18:11:02

On the savings front. If you can manage, my 6% regular saver with HSBC matures early march 2013 so I plan on either transferring that amount to this yr's Isa if not full. Ofcourse this would be more effective if regular saver matures 6 months before Isa year ends to maximise the "double interest you make".

Mum2Fergus Thu 18-Oct-12 22:19:27

So finally got organised and found time to get back online lol

ISA now full so regular saver ac opened and standing order set up for paydays. Rejigged my spreadsheet which now tells me I am 79% to target on the deposit front ...quite chuffed with myself grin

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