To save up to buy a house outright?

[applenblackberrysmoothie]

Two/three bed houses can be bought around here for less than £100,000.

If I put my mind to it I think I can raise this within six years. Is this a stupid thought or has anyone else done it?

[Moanyoldcow]

I was terrible with debt years back and got a CCJ - I had to have a guarantor for my first rental in 2006 when I moved in with my then boyfriend.

By 2009 I had done sufficient to qualify for a joint mortgage application. I've now got a great credit rating and have constant offers of more credit from banks etc (which I don't take up).

I'd save for 2/3 years and see if you qualify then. If not, keep saving.

Also, could you maybe save enough (say £60k) to buy a small house somewhere cheap and rent it out whilst continuing to save? You'd then get a better return and might find you are ready to buy sooner...

[OutToGetYou]

If your credit is that bad due to debts, what makes you think you can save at all?

[applenblackberrysmoothie]

I don't necessarily think I can but I hope I can. Better to try than to accept I'm useless l think?

[thebakerwithboobs]

We did it. Different reasons-husband is in military so we lived in quarters and saved every last penny we had. Bought our lovely home outright a year ago yesterday.

[isthistoonosy]

Why are you aiming for a house rather than a flat in say 3 yrs?
I cleared a 100k (plus 6% interest) mortgage in 4 yrs. Lived rent free and had almost no social life but it was doable.

[applenblackberrysmoothie]

Well to be honest flats and houses aren't really any different price wise. (I had this 'discussion' with my dad once!) I mean obviously there is a difference between a flat and a 4 bed house but a nice flat and a small house would cost about the same here. And I'd have to pay a management company with a flat. But really I mean 'a property' - I wouldn't necessarily be adverse to a flat.

Yay baker :)

[InvisibleKittenAttack]

how about save for a year, see how much you've got, and talk to a mortgage broker then? You'd need to save approx £1,375 a month on top of paying your current bills/rent, can you do that? You need £16.5k a year. It's a lot to save. If by this time next year you have £16.5k, then you could talk to a broker with a great history for the last year of saving, you should be able to get a mortgage.

[applenblackberrysmoothie]

Thank you :)

[todayshey]

Well I did scared, we were in a precarious situation job wise (unfortunately my industry is very pro bloody fixed term contracts!) so needing having a 20% deposit meant better mortgages were available. Can I ask what your repayments are on that? Our mortgage is 35 years, certainly not ideal but we were much more able to save than the banks gave us credit for so its all we could use to plus our case. Thankfully in permanent employment now but I don't think we could afford to make the step up to say a 260-70 very modest 3 bedder.

[Huldra]

If you can't get a mortgage atm I would mentally have this as my plan. Save as if you're buying the house outright then revise the situation every year or so.

In 2 or 4 years time you may be able to get a mortgage and have a great deposit. If house prices haven't soared in 4 or 5 years you may decide on a cheaper apartment and be able to buy that outright. Even if house prices rise in 6 years you will have a massive deposit and you may get a mortgage. Or maybe get a doer upper at auction, or an apartment, you could always rent it out.

If you mentally have the plan you will have some thing at the end, or be well on your way. If you don't, well you won't

[OutToGetYou]

You might find getting a mortgage is a bit easier than you think - although they do obviously look at credit score, they also look at affordability. A mortgage is backed by an asset - unlike most loans, or credit cards. So, in some ways it's less risk for the bank (etc).

In your shoes I would work out what the cost of the mortgage would be (over, say, ten years) and save double that for a year as a minimum. Then in a year talk to a broker about a mortgage and see how that goes.

Living mortgage-free is great, but if it takes you years to save for it the shine may be somewhat dimmed.

[Longdistance]

Well, in 6 years time, will they still be £100k?

That's the golden question...

I think not.

[hellomarshmallow]

Sorry if this has been said.

Factor in the cost of surveyors, solicitor and stamp duty. Your first sale may fall through, so you may need money for more than one survey and a bit extra for solicitor's fees (I had two sales fall through before success!)

I was totally clueless about these expenses before

[SheepyFun]

We did it, though for different reasons. In your position (when you know you want to buy and where - we didn't for a while), save hard for a couple of years, then talk to a mortgage broker. You might be able to get a fixed rate for, say, 5 years, during which you can save the rest of what you owe, then pay it all off then - most people remortgage if they get a short term fixed rate, but you might be able to own outright at that point.

If you've had a mortgage before, I guess you know about stamp duty, surveys etc., and have budgeted for them too.

[FinallyDebtFree]

OP this time 7 years ago I was just in the process of getting discharged from my bankruptcy. We have just got a mortgage offer through and are due to exchange contracts this week.

I basically changed the way I thought about money, got a credit card with £250 limit and used it to repair my credit over the last 6/7 years.

It's been a long ole slog but I've got there, the credit limit on that card is now £3000 but I don't use it and if I do I pay it off in full (use it to book flights/hire cars)

My credit report is squeaky clean and my broker commended me on it (he said that if I didn't tell him about my BR he'd have never known)

[PussCatTheGoldfish]

You have nothing to lose by aiming to save really hard for the next 6 years.

If by then you have £100k and house prices have risen, you will at least have a fucking awesome deposit and have learnt how to save! You could review you circumstances after 2 or 3 years too and still have a hefty deposit.

I do know someone who has done this, although it took longer (needed to save more). It's given them a lot of security in unforeseen uncertain health.

[beingsunny]

Can you apply for a copy of your credit report, it used to be Experian I think, should give you all the information about your credit history which will be the same as the banks use when assessing you for a loan?

[WashBasketsAreUs]

Totally misread this and thought it said houses could be bought for £10,000-read the whole thread trying to find out where these houses were!

[Porygon]

Given hope by @finallydebtfree as I am riddled with debt. OH and I now have good jobs and are 2/3s of the way through paying it all off (we had 75k!!!) but don't really know how to improve credit rating.

[Desperateforsleepzzzz]

I'd use the savings to repair your credit history first then save. Or 50/50. Like you my credit was shit literally the bottom of very poor, years of burying head in the sand , payday loans, CCJs defaults , the lot! This past year I've called all who were very reasonable and pay a minimal amount back and more when I can. It's gone from 260 😬 To 590 in a year , still poor but nearly in fair! I joined electoral register and paid off the very small defaults the larger ones I pay monthly and my ccj has finally gone as the 6 years are up. I have a crap credit card which I use then pay off. Wish I'd not been so ignorant but hindsights a great thing!

[Desperateforsleepzzzz]

My bank offers the equvelant of Experian but it's called noodle no charge and it recommends how to improve and highlights the positive and negatives plus sets out who you owe and how much

[FlouncingInTheRain]

If you're under 40 you could get a LISA and have a government top up on a percentage of your savings each year. It would stop the money being available for other stuff (without a penalty) other than retirement so you'd have to be determined to buy your property.

[TeacupDrama]

Actually in about 50% of UK you can buy perfectly liveable houses /flats for £100k here about 1 hour north of Glasgow in a nice town with good schools you get a 2bed flat, 5 miles away it would get. 3 bed terrace

[InvisibleKittenAttack]

Apart from anything else, think very carefully about your lifestyle now and what will have to go - do you have a spare £1375 each month after bills have been paid (the amount needed to save £100k in 6 years)? If so, a) why don't you have a big savings now ? Have you been paying down old debt and just finished? If not, what has the money gone on? If actually it's living costs, can you cut your living costs down that significantly?

A lot of people massively underestimate their costs - they say "my bills all come to £X a month leaving my £Y a month left over" but don't factor in food costs, travel costs (particularly happens with people who pay daily rather than buy monthly travel cards or factor in car tax/insurance but not petrol) buying birthday/christmas gifts, holidays, clothes etc. If it's just on going out, will your food/drink bills from the supermarket have to increase to cover all the meals you are now eating at home?

I assume you are paying rent now, you definately would be better off saving as hard as possible for 12 months, then trying to get a mortgage that allows you to overpay.

Good luck!