Buying a first house

[tammybear]

I'm not actually buying one, only just started working again so have a long way off to go, but I was talking to someone at work and we were talking about the future and he was saying that he and his girlfriend are half way saving a deposit for a house. So it's got me thinking as I don't want to always be renting, and when me and dp live together, I would like to think somewhere along the line we will be able to buy a house and get a mortgage and everything.

So I have a couple of questions, as I don't know much about this stuff, and my mum's no help with trying to explain things to me. How much is roughly a deposit on a house? Someone told me it's about 10% of the house? Um, did have another question but cant remember it now Thanks xxx

Think it's normally 5% for a first time buyer tb

It's normally 10%, although it very much depends on what size mortgage you are going to have. If, e.g., you get a 95% mortgage, then you will probably only be looking to fund 5% of the purchase price yourself. Technically sellers can ask for a 10% deposit, but most will accept 5% if the buyer is getting a mortgage of 90% and above. However, don't forget to ensure you have enough money to pay solicitor's fees, stamp duty (if applicable) and any other disbursements.

ah thanks, and I wouldnt have known about all the extra bits that goes with it too so thanks for that freckle.

I'm quite worried as I'm renting at the moment, and although I get HB, I have to pay some of the rent as I'm now working, so hoping I can save what I can. They say I'm supposably £200 better off a month than I was as a SAHM so if that works out like they say, I should hopefully be able to save most of that. Luckily dp is still at home so he doesnt have to worry about paying bills and rent, and although we will be semi living together in September, he'll still be technically living at home as he will just be around mine 3 or 4 nights a week depending when he has to go into college (doing his last year of his degree) as he will still have to go back to his home to go to work. I hope we'll be okay, as things are getting so expensive now.

Just to give you an idea, when we bought our first house (£100,000) we saved a £5000 deposit (I think 5% is pretty standard nowadays) and £2500 for stamp duty, solicitors fees, surveys and searches etc. Plus we needed a load of money to do it up once we had moved in. Took us years to save enough but glad we did it as made a lot on the first one so we've now got a relatively small mortgage.

We didn't have much spare money but saved hard and got there in the end, so dont worry it is possible!

so it would be a few thousand for solicitor fees and extra bits then roughly?

depends where you're buying and the solicitor's firm. get loadsa quotes! I was a conveyancing solicitor and I know that the quotes can vary lots and dearest is not necessarily best sometimes!

Stamp duty was the biggest bit I think, 1% of the house price

You'll need a few hundred (possibly) to pay for the lender's valuation, the solicitor's fees are usually a percentage of the purchase price (e.g. 1/4%, 1/2% - might seem high at the time, but you'll appreciate what a good deal the solicitors are when you come to sell and have to deal with estate agents' fees!), any structural survey you choose to have done, not sure if you have to pay for a search these days as most sellers now have to produce sellers' packs which include a search. Can't think of anything else off the top of my head, other than stamp duty, which is 1% of the purchase price between £60,001 and £250,000.

Crikey! didnt realise so much went into it. thanks girls, but will be a long way off before we'd have enough for a deposit, unless we win the lottery But least you guys have given me a better idea of what we will to save up for. Thanks

5% fairly normal

couple of ways round that

.. some house builders do deposit paid for you
.. you can get a 100% mortgage (but can restrict which mortgage products you can get)

You'll need to have a few hundred for surveys but most of the other costs stamp duty, legal fees etc can be met out of mortgage

HTH

Tammy - I think you can get quite a lot of info re house-buying from leaflets in the building society....at least you could last time I bought (9 yrs ago)

Also, if you buy from new, housebuilders quite often offer special deals like cash-back and legal fees paid - depends on how keen they are to sell their houses.

Ive been looking around banks/building societies for info, and I found out Nationwide do a 100% mortgage. Are these any good, or is it better to have a deposit to put on the house?

Ive been looking more into it now, as it looks like dp will have to give up his job in September when he does his final year for his degree near me, but will still have to live at home in Kent (I'm in Watford by the way). I've been quite worried about this all, as it looks like it'll be even longer before we can afford to save enough money.

Tammybear, you'll almost certainly get a worse interest rate on a 100% mortgage and you'll be much more limited in terms of choice. Plus as you have to pay your fees and whatnot on top of this, you're effectively in negative equity (where you owe more than the house is worth) right at the start.

I must say I bought my first house with a 100% mortgage, but I wouldn't do it again. The way the housing market is going at the moment, saving whilst renting probably won't do you any harm.