First time buyer advice

[Guest]

Originally Posted by dreamadream

Thank you.
Would you say a broker is essential for a good deal?

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No I wouldn’t say it is essential for a good deal. However you are a high LTV and using a broker could save you a little bit of time in finding lenders willing to lend. However I think you could achieve the same with a bit of googling.

I used a broker for my first mortgage as I needed 100% mortgage and back then the internet was not really a big thing. I remember about that time my flatmate told me our mutual friend had booked a hotel “on the internet” and we both marvelled.

[dreamadream]

Thank you everyone. That’s all really helpful.

We do have a house viewing tomorrow for a house that ticks all our boxes but it already has an offer pending, not bad seems it was put on the market on the 18th. We may cancel the viewing as we haven’t started the process yet so may be wasting everyone’s time.

[MrsG26]

I am an independent whole of market mortgage broker, my advice in this current climate is to speak to someone before you put any offers in on a property. With the current situation as it stands you are needing at least a 10% deposit and even then there are far fewer lenders offering products at this LTV. Mortgage products with only a 5% deposit have disappeared from the market , and lenders are being extra cautious incase there are down valuations. Lenders just don’t want to risk lending at that higher LTV.

Up in Scotland our first time buyers can take advantage of the First home fund where they can get up to £25k from the government to put down as a deposit towards the purchase, and that is the route that most are taking currently as it’s nigh on impossible to get a mortgage without a minimum of 10% . There are a few lenders; just not the level of products and lenders we had before the pandemic and the rates are now as high as what the 95% loan to value products were previously.

Good luck with the viewings but please speak to a qualified adviser before you take the next steps. We are trained to know all of the market, the niches. Lender criteria and of course access to exclusive products that you may not get going direct.

Good luck ☺️

[123]

Originally Posted by dreamadream

Family can kindly lend us money if the banks want more than 5% or he suddenly wants to sell.

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Just as an aside (and not what you want to hear probably) the banks will want to know where you deposit has come from and if it is a loan and not a completely "string-free" gift then it won't be taken into account as part of the deposit requirement as you might be required to pay it back at any time

[tspill]

Originally Posted by dreamadream

Thank you.
Would you say a broker is essential for a good deal?

See more...

Personally, I do all my own research so didn't use a broker when we borrowed a couple of years ago. I knew exactly what I wanted for my circumstances.
It is like all things, you can put the effort in and diy or get someone to help you.

[Thorpy]

It's been a while since we moved here, so I'm not sure what I can add, but there are a few good points which are worth reiterating.

1) If you buy where you rent, then the comments about estate agents and savings are valid, you will save the landlord money in the selling process, so you should get a decent slice of that saving, or send him elsewhere to make less money. You also save yourself moving costs, which he might bargain with...but you can say you have a friend with a van who does it for free...so you appear to save nothing, and want a cut of the favour you're doing him by not involving an estate agent.

2) If you buy where you live you have a far greater understanding of the condition of the house than you could possibly have over any other house via reports. Use this to your advantage, by getting a survey done, but by pointing out to the surveyor all the jobs that "need" doing so they go in the report. They can then be used to get the landlord to pay to complete them before you pay his price, or request he gives you a discount in lieu of the work that the surveyor said needs doing.

3) View other houses, as I would put my mortgage on the fact the landlord will claim he knows the market better than you and will try to overcharge you. This may involve him getting an estate agent round so that his valuation looks independent and official. Remember the estate agent works for a seller, and if he puts some work their way, they may well be prepared to value this property on the high side as a favour. If you don't like the price be prepared to not pay it. If you tie yourself emotionally to wanting a single property, and they realise this, then they can crank the price up, and you overpay.

[MrsG26]

Originally Posted by 123

Just as an aside (and not what you want to hear probably) the banks will want to know where you deposit has come from and if it is a loan and not a completely "string-free" gift then it won't be taken into account as part of the deposit requirement as you might be required to pay it back at any time

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That is correct, the lender will only consider a gifted deposit from family otherwise it will be seen as a loan and a monthly loan payment factored in for affordability . A gifted deposit is the easiest option for all parties.

[catherinesian]

Originally Posted by dreamadream

Thank you everyone. That’s all really helpful.

We do have a house viewing tomorrow for a house that ticks all our boxes but it already has an offer pending, not bad seems it was put on the market on the 18th. We may cancel the viewing as we haven’t started the process yet so may be wasting everyone’s time.

See more...

If the offer is pending it means the seller isn't happy with it. Honestly I would go, if you really love it you can get a decision in principle quickly enough to enable you to make an offer.

[SquishTheWhale]

Originally Posted by 123

Just as an aside (and not what you want to hear probably) the banks will want to know where you deposit has come from and if it is a loan and not a completely "string-free" gift then it won't be taken into account as part of the deposit requirement as you might be required to pay it back at any time

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My parents lent us half our deposit. We had to have a letter saying it was a gifted deposit. In reality we're paying it back (and our mortgage and paying it back combined is still far cheaper than the rent we were paying! ). So it has to be done on trust from your families side really as legally you could turn round and say I'm not paying you back.

[123]

Originally Posted by SquishTheWhale

My parents lent us half our deposit. We had to have a letter saying it was a gifted deposit. In reality we're paying it back (and our mortgage and paying it back combined is still far cheaper than the rent we were paying! ). So it has to be done on trust from your families side really as legally you could turn round and say I'm not paying you back.

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Absolutely, and therefore to use this you need to have a letter from the family saying it is a complete gift with no need to repay.

Now as its a family "gifting" the cash, you could go on trust, but if you opted to not repay them then they couldn't force you to.

Quick point though if you need to remortgage or fall into late payments, the bank will look at your finances when you re-finance and say what is this £500 a month (or whatever) that keeps going out to your parents.

If they suspect it is a loan the best you can expect is them to refuse to lend to you again, the worst is they start proceedings against you for FRAUD on a mortgage application