First time buyer - WWYD?

[user1470572649]

I'm looking for a few opinions on buying houses as a first time buyer, I'm in my late 20s and am about to come into a large sum of money - around £80k. It would just be me buying the house and my salary is about £20k pre tax, I wouldn't want to put all of my money down as feel like I need to keep some for legal fees/decorating/furnishing/just a backup stash of cash.

There's a new housing development popping up near me where I like the look of the semis which are priced at £195k with the developer giving 5% discount for first time buyers. I appreciate with new houses (or certainly these ones anyway) you need to put down a 25% deposit so I would be looking at putting down between £50-60,000 but I don't know if this seems reasonable? Is it realistic to think I can keep up with the repayments on my salary? Would you go for something like this in my shoes or would you wait for an older house to come up? There aren't many sub £200k houses in my area so it's a bit slim pickings at the moment but in the back of my mind I'm aware of the fact we are now into recession and house prices will likely drop soon and I may be able to get more for my money.

I am going to see a mortgage advisor when the dust has settled and I actually have the cash but just wanted to get some thoughts in the interim as truthfully buying a house is now all I can think about now that it's looking more like a reality for me!

[Stinkyjellycat]

You don’t need to see a mortgage advisor to either take out a mortgage or to work out what you can borrow. Go onto a comparison website or a few bank/building society websites and use their calculators to see a) what they will lend you and b) what you can afford to repay. Unless it’s changed (I may be out of date), banks don’t usually lend more than 4 times your salary so you may need to consider cheaper properties.

[sallyshirt]

Agree with stinky your first step is to look online at the hundreds of mortgage calculators.

My mortgage broker got me 5 x my salary - but it was a re-mortgage, I have a good amount of equity in the my home and I was using the extra capital raised for a home extension.
I would say 4 x salary is more typical, but as you are young you might get more.

But you could also ring you bank and see what rates they offer. That will give you a realistic starting point.

[ilikefakeplants]

Agree with the above. I think you may need to look at cheaper properties as even with the full deposit of 80k they may not lend you £100k - £115k based on your salary, from what I remember when I was doing the online calculators whilst buying my house on a similar wage to yours although I bought with my DP who earns double my wage, I think you will be able to borrow about 80-90k, don't quote me on that though, use the calculators online to get an idea of how much you can borrow. You don't want to use all of the 80k either as you will need money for fees, solicitors, furniture etc so definitely think it's wise to look at a lot cheaper houses.

It's a very exciting time buying your own house and I wish you all the luck in finding your perfect home 😊

[sallyshirt]

Adding....

If there is any way you can increase your salary in the meantime that would be helpful.
Eg if you earn £20k you might be able to borrow £80k. If you earn £25k you might be able to borrow £100k.

You earn less than average at the moment, and any bump up will help.

[Bluntness100]

I think you’re ok on the pay back side, I’m just not sure you can borrow as much, you need to speak to some advisors.

195 minus five percent is 185. Put down eighty, gives you 105 you need to borrow. So more than five times your salary. On your own it’s generally three times, so you might struggle.

[JoJoSM2]

I’m also not too sure that you’d get over 100k mortgage on your salary.
It’s also worth pointing out that new builds attract quite a premium so it’s considerably cheaper to buy a second hand property. You aren’t in a rush so you can wait for the right place to come up.

Personally, I’d put down 70k and keep 10k back. That’s enough for fees, a few pots of paint, some Ikea furniture and a new bathroom or other project if needed.