To wonder if I’ll get a mortgage?

[firsttimebuyer7]

Posting for traffic!

Just looking to see if anyone else has been in the same position as me and can offer any advice. I’ll be speaking to a mortgage advisor at some point during the next few weeks anyway but it’s always good to hear other people’s experience.

I’m 25, single and currently rent a 2 bed flat and have been here for the last 4 years, however it's always been my goal to get on the property ladder and I’ve been putting money away every month for the last few years and also saving birthday/Christmas money as well. I have roughly around 4K in savings which I appreciate isn’t a lot. I earn 20k a year (well 17-18k after tax/NI plus mileage expenses).

I have seen a 2 bed flat just down the road from where I live for sale, on a new estate. Asking price is £125,000 but I’m sure we would haggle (my mums words, not mine 😆). Question is, do you think I would get a mortgage given my financial situation/circumstances?. I know it all depends on earnings and the value of the property etc but would love to hear your views. I’ve also been looking at many of the different schemes which help first time buyers. Thank you 😊

look at 10% deposit OP, and i would absolutely reccomend not buying a new build if you can.
I get it is helpful with help to buy schemes, as some do help with deposit contributions, but their prices are hugely inflated.

good luck OP, its a tough time!

At your age, I would either go home and save for a year to get my deposit up to £10k or I would get a lodger in the 2nd bedroom. I'd charge them a fixed price including bills and save that entire amount.

Carry on paying the bills as normal whilst selling what you not need and live very frugally. I would do this for 1 or 2 years and then buy.

I definitely think you can buy in the next couple of years and if you keep your job and make it through covid/Brexit recession, you will be in a really strong position.

I get it is helpful with help to buy schemes, as some do help with deposit contributions, but their prices are hugely inflated.

Help to Buy has nothing to do with what property you choose to buy, you choose the property and make an offer in exactly the same way as anyone else

Your deposit is too small. I was actually speaking to a mortgage advisor on Wednesday and I offered a 10% deposit. She said that there were no options coming up for a 90% mortgage at the morning due to the circumstances, and the smallest deposit I would need is 15%
I earn the same as you btw

@Cam2020

At the moment, most banks have pulled 10% deposits and require 15-20% due to Covid 19 market instability. This may or may not change again, depending on the economic outlook.

I was going to post this. DP and I are first time buyers who had an AIP for a 95% mortgage pre covid but that’s not possible at the moment, and even 90% mortgages are proving hard to find with only a handful of lenders offering them. So just bear in mind that lenders are very risk adverse for the time being.

If you leaving it longer can you move the savings you already have for a deposit into a LISA you get 25% towards first house purchase (you will need to check how long you have to have funds in there before purchase as I’m not 100 percent sure of all details of scheme check out Martin Lewis, which would help boost deposit and you could look to buy in couple of years but also check out broker like L & C to see if they is any options to see if you could get mortgage now

You'd be lucky to get a 90% LTV mortgage these days, with your £4k deposit that's a property with a value of £40k, so no, no where near being able to afford a property worth £125k

I think the 4k will cover your legal fees and then you would need a deposit of 15k. It's brutal.

Yes hold out until the recession kicks in, you'll get a better deal then

There is a savings account for you where the government match your savings by 25% I believe, if spent on a home or pension. Sorry, I don't know the details, but Google it.

@DianaT1969

There is a savings account for you where the government match your savings by 25% I believe, if spent on a home or pension. Sorry, I don't know the details, but Google it.

They will match up to £1,000 a year which isn't really a lot when typical deposit are over £20k

@longtimecomin

Yes hold out until the recession kicks in, you'll get a better deal then

If you still have a job... Because... Recession...

Talk to a broker, they can be miracle workers. When I got my mortgage there were mortgage products that accepted a good rental history as proof of being able to meet mortgage payments. They didn't care how you how your deposit. Not sure if that sort of product exists in the UK but it was perfect for me.

If it does exist, would your parents be in a position to top up your deposit?

Talk to a mortgage broker sooner rather than later. They'll put you on the right path and let you know what mortgage products would suit your particular situation.