AIBU to not know what the hell I'm doing.. first time buyer, please help!

[PixieBob28]

So my husband and I really want to buy a property we have been so lucky to have been gifted £30k deposit from his dad who is going to withdraw it from his pension. He hasn't drawn it out yet until we find a property (as the longer it stays in there it gains interest) but when we do he will, which should take a month or two at the most.

We live in an expensive area and would like to stay near to here. We have been looking for a 2 bed flat (we have a son) and the nicest flat that we can afford is around £200k or ideally £190k if they accepted our offer in a nearby town.

We have arranged an appointment with our bank at the begging of December to talk about our options as our rent tenancy ends in April. But I don't have a clue what to do or what's going to happen?

There are currently 2 properties we are interested in but until we know how much they will lend us it seems pointless but at the same time don't want to let them go if we fall in love with one of them. And surely if we are approved and we know we like the property we can put an offer in straight away? From just doing their online calculator it seems they will lend us around £160k so + the deposit it may be doable.

How long do bank mortgage offers last? We have to take in documentation of our last pay slips which is fine. We can afford the £950 rent now so I don't see why we wouldn't be able to afford the £800 (with flat maintenance fees) if we did buy a property.

We don't have credit cards, no debt, and apart from he obvious bills nothing else to really let them know. We do both have student loans but only recently has a couple of quid been coming out each month. We too have around £2k extra in savings for solicitor fees, moving costs etc.

On average my husband's salary is around £18k and mine is around £16k, rubbish I know but we live in an area where there aren't many jobs and I've had to go part time to look after our baby.

I'm just looking for experiences from other first time buyers really. How long did the whole process take? How long do the mortgage offers last? Does it really work offering people less than they want? How much do solicitors fees and other unexpected fees cost?

Please be gentle, I might be 29 but I'm clueless about these sort of things and don't have many people around us who have bought properties recently.

Thanks in advance.

Rather than the bank, I would go to an independent financial advisor who will have access to a wider range of mortgage products which may get you a better deal.
In terms of timing, as soon as you have your mortgage in place you can make an offer, however you need to consider when you would want the sale to go through. You might find that if you don't want to take possession till April some sellers may want you to move more quickly. When I moved from rented to my own, I ended up with 1 month paying for each.
Good luck!

Usually mortgage offers are around four times salary, having children is taken into account in terms of financial outgoings too. As first time buyers you might find a whole of market independent financial advisor can get you a much better deal than your bank, also remember everytime you apply for a mortgage it leaves a footprint on your credit history, so rather than going bank to bank accruing various footprints doing it all in one place can be better, they do soft searches first which have no impact. I owned a flat when DH and I bought our first house together my credit score was exemplary his was decent but not amazing, our bank offered us the amount we needed but with a 30% deposit. Independent advisor got us a higher offered amount from a high street bank with a ten percent deposit and a much lower interest rate, to be clear whilst DHs credit score wasn't fantastic he's never defaulted on anything just a few late credit card payments five years before the mortgage application.

You want a mortgage broker, they will find you the best deal available. We had one and he was amazing, we didn't pay him anything either, he gets his commission from the mortgage company. First they will give you a mortgage in principle, that lasts 3 months, then you get the full mortgage offer when you are ready. Good luck!

Make sure your broker covers whole of market

Definitely go to a broker rather than a bank you will get a better deal

We just bought our first house a couple of months ago and second the suggestion to use an independent financial advisor or mortgage broker to sort out the mortgage. They did everything for us xx

Martin Lewis the money saving expert guy recommends London and Country, I used them recently and they are brilliant. They are whole of market (as above) and organise everything for you for free. You deal with them over the phone and they answer all those questions for you.

They will give you a mortgage in principle which is a letter to say you’re good for up to £x, then when you’ve agreed a sale they’ll sort the actual mortgage offer for you.

Does it really work offering people less than they want?

It’s basically the same as say, buying a pair of doc martens off eBay.

Depends how many other people want them, what condition they’re in,how fashionable doc martens are right now, how badly the seller wants to get rid of them, and how much you want those specific boots.

How much do solicitors fees and other unexpected fees cost?

You want to be putting aside at least 3 thousand pounds for this stuff, that’s just my experience. Don’t go with just the cheapest solicitor.

OP I could have written your post. My fiance and I are in near enough the same position, a £35k deposit, just no children and we have no idea where to start! Thank you for starting the thread

L&C are indeed great but they are not whole of market. No broker is, as HSBC and First Direct don't use brokers. It's worth having a look at their online calculator too, oh the off chance they would give you the best deal.

I strongly recommend reading this from cover to cover:

www.moneysavingexpert.com/mortgages/mortgage-guide/

I second (well a lot more than that 😂) a mortgage broker. We decided to speak to one just to get some idea of what we might be able to afford, and we had an agreement in principle a week later. We started looking straightaway (August) had an offer accepted in September and moved in the weekend before Christmas.

The only problem with looking while you are renting is that once you've had an offer accepted, the rest is a 'how long is a piece of string' answer - our offer acceptance to completion was 13 weeks, but I know people where it has taken 8 months, so have a back up plan so it isn't too stressful

Definitely yse an IFA, if you have no credit history this may reduce what they will lend you. An IFA will know which lenders are most sympathetic for your circumstances.
You’ll need to do an affordability assessment with the IFA and they will then apply for a mortgage with the best lender for your circumstances to increase chance of acceptance.
A mortgage of £160k might be a stretch if you don’t have much credit history but not impossible. Depends how they view your other outgoings.

Mortgage offers are usually valid for 6 months, but you just need an agreement in principle to start making offers then you can complete the application.

You will need proof of deposit though so you’ll prob need evidence that the £30k exists with a letter that says it is a non repayable gift and not a loan.

Solicitor fees vary hugely by area and the type you go for. I’d budget about £1500.

Some mortgages have fees but you can often just add these to the mortgage. You’ve got no stamp duty to pay so it’ll then just be removal costs plus buildings insurance.

I’d allow a good month for mortgage process, then once you have an offer accepted it can take as long as you like really. Quickest purchas for me was 5 weeks, longest 7 months!

Do go to a mortgage broker or financial advisor. You'll get a much better deal than going straight to the banks on the high street.
If you've never used one before then i guess you don't know where to start so i sympathise. Ring round a few local ones.
The whole process is a rollercoaster of emotions and delays. Assume 3-4 months.

Go to a Broker for sure. Why are you delaying it until December anyway? Get in there asap at have those conversations.

Hi, we brought our first house two years ago and I know it’s very overwhelming from mortgages to dealing with estate agents. We went to a bank for a mortgage in principle to get an idea roughly of how much we could lend to then start looking realtiscally and then when we made offers were able to let the estate agents know we had a mortgage in principle. Finding a brokerage as others have suggested is a good idea. We used one and paid a one off fee. He found a range of mortgages for the best deal, explain what fees the banks charged within the mortgage deal and dealt with the application etc which took some pressure off. As the deposit is being gifted I would check if the mortgage provider you choose will request additional paperwork about this as we had to send evidence of savings etc in the application process to show we had money for the deposit. Our broker also suggested the solicitor we used. Good luck OP

We used these guys as our solicitors. Good price and they are really tech savvy - so you can see online as each of your searches comes back and all the documents are online too. You can run the whole thing from your mobile. And they respond to emails within a day. You have no idea how rare that is! They were 100 miles away from us so distance doesn't matter.
www.fidler.co.uk

I'd pay for a financial advisor/broker unless you user London and country. The ones who get commissions may be swayed in terms of which mortgage to recommend to you based on how much commission they will get. Our IFA also got us a very good deal on life insurance which I'm sure he did make a commission on but there was no hard sell and it was a better deal than we'd been able to find ourselves, please don't think life/critical illness insurance isn't necessary think about what would happen should one of you be ill enough long term to not be able to contribute to the mortgage.

We also used fidler.co.uk as recommended by our broker and they were really good especially the online account to check for updates. It saved having to call and chase. Our first house sale fell through and with fidler we didn’t have to pay for the search costs again as we stayed with them for the second house purchase.

Logical order:

• Broker (London & Country are good and free, but we used a local broker for our last move who was £200, a bit faster and we could see face to face). Once you have your mortgage in principle you'll know your exact budget.

• Start looking at properties - flats are almost always leasehold so you want to be asking about things like service charges, what's included, clauses about pets if applicable etc

• Find a solicitor and check the deposit situation with them - for gifted money you may need to complete extra forms and checks against money-laundering. This may take extra time. You probably need to draw the deposit down soon, as if you make an offer and things move quickly, it might delay exchange of contracts if your deposit is tied up (or make vendors nervous if they find out that it's going to take time to access).

We used a broker who charged no fee. Process was so easy with him. He gave us the best deals available to him and we have used him again to get a fixed term for a further2 years. You need payslips and bank statements.

For the £30k you will need to show ‘sourcebof fubds’ To satisfy anti money laundering checks. A statement from the pension provider or letter to FIL, then showing transfer from his bank to yours.

Haven't RTFT but my mortgage offer was valid for 3 months. I also offered 10% under asking and they accepted. There was no chain so I bought and moved in within 8 weeks but that is quite quick.

:) hope it helps

You need a broker, go see one with your payslips etc and they can find out what you'd be able to borrow. You will need to know as with a dependent and not a very high income, you might not be able to borrow as much as you would like. Also, 2k will just cover solicitors usually - so keep saving!! Well done

Thank you for all the replies everyone, really appreciate you help and some fantastic advice on here.

I have called a local mortgage advisor so waiting to hear back from them and will also check out L&C online too.

In the mean time will keep on saving!

In regards to some questions answered, I had a finance car for about 5 years with no missed payments so credit score should be good.

Fingers crossed and thanks again. I won't start looking at properties until I get my offer, if I get one that is.