SupaMiniCupa

Folks, hoping you can give me help and advice. I'm 25 and still live at home, and the time is coming to move out (buy, not rent). Ideally I want to do this on my own, as I don't want to buy with anyone else yet (although I wouldn't mind sharing with a rent-payer). Now, despite my age, I still live like I'm 16-18 and don't have a clue what it costs to live life in the real world. I'm sure the board to my old girl doesn't really cover it!

Problem is, I'm really concerned about house prices/interest rates etc. Conflicting opinions about rises/falls etc, so I want to sound you all out about whats feasible, whether I'm going to be stretched, whether I'm going to be able to afford it etc. I've saved really hard over the last couple of years, and don't want to see it wasted! (I don't particularly want to say how much at this stage).

OK, here goes with a few details.

Salary: £20k pa
Take home: £1250 pcm (say £1100 after running my car)
Personal Debt: None
Other outgoings: None

Houses round here can be had for say £115k for a terrace (2-3 bed?) in an average-ish area.

So, how would you attack this?

(1) What kind of deposit should I look at?
(2) How much should be budgetted for essential monthly bills/outgoings etc?
(3) How much should I set aside for furnishing a house?
(4) Can I use additional rental income to get this kind of mortage?
(5) Is it all going to stack up OK on my salary/take home?
(6) Am I worrying/being tight etc for nothing?

For the record I know there are people worse off than me for property prices/salary etc so no complaints there.

Apologies in advance if anyone thinks this is a lame thread, but if you dont ask you don't get!!

Opinions appreciated - ta!

boxst

Hello

(1) What kind of deposit should I look at?

As much as possible, people will give you 100% mortgages, but if you can go on with £15K in your example above that would be a good minimum.

(2) How much should be budgetted for essential monthly bills/outgoings etc?

Mortage of £100K is about £550 a month (actually less)
Electicity/Gas probably £45
Council Tax: £60 (I'm guessing)
Food: £300


(3) How much should I set aside for furnishing a house?

A few thousand to get you going (Bed/TV/Pots Pans/ Sofa etc..)

(4) Can I use additional rental income to get this kind of mortage?

Yes

(5) Is it all going to stack up OK on my salary/take home?

Yes, but it'll be tight.

(6) Am I worrying/being tight etc for nothing?

No, it's sensible and if more people did due diligence they wouldn't get in trouble.

Steve

The Zohan

Not sure what your mortgage will be
but regards outgoings - heres our list

Water
gas
electricity
council tax
Landline
mobile
food/shopping
clothes
fuel
road tax
house ins
car ins
car repairs/servicing
sky
broadband
tv licence

Chip

Don't forget you'll need a few grand to equip the house out in the first place.
Things like washing machine,tv,kitchen equipment, hoover etc all mounts up to a few grand.

And you'll also need to have money to replace or repair anything that goes wrong.

And if you like your holidays as well.................

It could go on and on.

But go for it. If you dont get on the ladder somertime you'll never get on it.

Best of luck.

Chip

Leslie

PSL is on record as saying that he would find it hard to "put a loaf on the table" for less than the £90K that he tells us he gets for part time work!

Better ask him how he scrapes along!

Seriously it is not easy and you will find it a bit of a cultural shock when you move out of home. It is important you try to get on the housing ladder as early as you can though and the only way is to save until you can find the deposit and then pull your horns in to pay for the mortgage. Mortgages always seem impossible to cover at first but somehow one can manage and its gets easier as time goes by.

Les

Petem95

Remember you always need to put aside some money each month for un-expected expenses as these will always arise from time to time and cant really be planned for!

IMO its a bad time to be buying a house. Ok prices are past their peak (summer 2004), but the doward trend is likely to continue for some time.

Interest rates are looking like they'll probably be going up next time they change to counter rising inflation. Also just look at the headlines, sharp increases in the numbers going bankrupt, home repossessions increasing constantly - unemployment keeps going up.

This sounds like the sort of quote an estate agent!! Simply not true, and many of the homes being repossessed now are probably FTB's who overstretched themselves because they listened to quotes like this!!

Dieseldog

On an economy cycle, £25/day should cover absolutely everything except a mortgage - all house & car costs, clothes, xmas pressies, dining out, beer money, everything. Add in £15/day for the interest on a £100k mortgage, and it's £40/day - i.e. £14,600 /year and that's out of your take home pay. So get a couple of rooms rented out, do work on the house yourself and in 10 years you'll be laughing

V1CK1

Do whatever feels right.

It is daunting when you buy your first place as its such a big step. I nearly didnt go through with my purchase as i was worried about how much it would cost etc.

If you dont do it now, you could be waiting years. The market may drop further, it may go up in the next couple of years, no one can say for sure.

The one thing to remember is in the end property value always rises. As long as you put down a good deposit and dont over stretch you will be okay.

Unfortunately credit is given out so easily nowadays people get in to debt quicker and quicker, living beyond their means and then moan about it.

If you cant afford something dont get it.

Always make sure you have some savings as things tend to go wrong all at once. As long as you can pay your bills everything will be fine, so what if you cant go out for a month or so, it is worth it in the end.

Vicki

David Lock

Make sure you buy a house in a reasonable structural condition and don't skimp on survey costs. If you get that wrong you could be looking at big bucks to sort it out.

If you don't mind second hand stuff and look around carefully you can get half decent furniture and appliances at good prices. I don't agree with comments about waiting to see what the market does but everyone will have a different opinion on this!

ScoobyDoo555

The BEST thing you can do is have a chat with a mortgage lender - they work all these figures out for you.

There are alot of variable factors (such as Council tax bands, phone etc) + as everybody has mentioned, as slush fund for when things go wrong.
However, in the real world, not everybody has the finance to afford a "rainy day" account......

You'd also need things like contents insurance etc...... Your car insurance will also change depending on your cirumstances......

While you can, I'd also be looking at setting up a pension - very hard to do once, you're on the property ladder, along with a partner/wife/kids etc.....

All that said, you're doing the right thing - get on the property ladder AS SOON AS YOU CAN. It's only going to get harder.

Dan

scoobypreza

I would say don't worry about spending loads on furnishings ect.

All you need is somewhere to sleep, somewhere to sit and a microwave to start with!

I didn't have much when I bought my first house.
I got a few bits and bobs from family e.g. old wardrobe, sofa stuff like that.
I took my bed from home!

Then you can build on that when you have the money.
And you get a better idea of what you need.

I'm sure you will have offers of stuff from people you know.
Check out the free listings papers, freecycle and e-bay... you don't need to spend loads.

The main tip I have is to pay everything monthly by direct debit.
That way you don't have a huge bill arriving at the end of each quater that you have to find money for.

Good luck on your adventure..... it will be great I'm sure

cath

Chip

Surely every ladder has a bottom step has'nt it??

Chip

webby v7 slipperwagon

iTrader: (2)

Too much, especially with rugrats.

SupaMiniCupa

Wow! Great replies, thanks a lot folks. Knew I could rely on NSR!!

Anyone anything else to add?

ChrisB

£300 a month for food living solo?

I budget £125.

davegtt

me and the misses spend about £50 a week food shopping but it depends how much you drink... you buy a crate of lager every weekend it'll soon mount up although its defiantely cheaper than the pub... but out of that £50 a week we also end up spending cash on 2 or so take outs in the week, typically friday and saturday nights....

Petem95

Yep, it was the "get on it now or never" sort of thing bit I was on about

PG

Buy now and it will be tight. You will have to make a few sacrifices but better that than stay with your folks forever more. 5 years down the line you will be wondering what all the fuss was about !
When I bought my first house I got a couple of mates in as lodgers. Their £150 pm (over 4 years) each paid the mortgage and the excess went into savings.
They moved out and the wife moved in so things were always quite easy for me. I have now moved to a much larger property with a much larger mortgage and yes, it is a hell of a lot harder than it was but it is just a matter of time before everything is very managable.

Drunken Bungle Whore

I'd defnitely agree with the furnishings comments - you really don't have to do it all at once - just start with what you really need.


Ask around friends and family - people are always throwing away something that could be useful - it may not be your exact taste but if it's free, who cares! Also track down your local charity shop furniture place - when I got my first place I bought wardrobes, a washing machine, chairs etc and didn't pay more than £30 for anything. Most of them will deliver locally for free too. Loads of the stuff is really good quality, if a little old fashioned, but it was great until I could afford to replace it with things I really wanted. (In fact I've still got a chest of drawers I bought back then and that was 12 years ago!)

I've been chatting to a couple of friends over the weekend - both very closely involved in the property market - and expectations are for things to pick up in Spring. But then again, someone on here is bound to disagree with me and no one will really know until it happens.

If you want to move out now and you really want to make a go of it then go for it. In the unlikely event that you did get into financial problems most lenders are very sympathetic as long as you can offer some form of monthly repayment.

Make sure you get a fixed rate mortgage to start with as that will help you budget - and the more deposit you can put down then the better the mortgage rate you get (generally speaking!). Dig out an independent financial advisor - it shouldn't cost you anything (they get commission as and when you take out a mortgage through them) - and they can advise you on a broader range of options.

Good luck!

ScooBStu

If you happen to have a scooby I would start with the Autotrader!!!! Seriosuly on your salary and that kind of mortgage it will cripple you.

I was a lodger recently whilst working away and was paying £253 to the landlord/month - If you get two in they will nearly pay the mortgage but be careful - There are some weirdo's out there - I know I have lived with one or two. Make sure you get them round and interogate them before agreeing to let them move in!!! Also put your foot down if someone moves in and is lazy.

I have my own house and thought at the time of buying it that it was soooo expensive - We put down a big deposit though and we are selling our house to move up - It is up for sale for over £130,000 and our mortgage is less than half of this - It definitelly gets easier after a few years - We have owned it for less than 2 years.

At the time everyone was saying house prices are going to crash - Down 30% etc and I was really worried but bought anyway - It turned out to be a reasonable time to buy in hindsight.

I had to sell my Clio cup at the time I bought my first house and buy a £500 H reg Polo off a mate for 9 months - It was cracking car though!!!

Brendan Hughes

Frankly, if you're already asking such detailed questions as these before doing anything, I'd say you're intelligent enough to go ahead and do it without problems. As long as you can swallow your pride and not demand to live with everything new and fashionable (that includes a car, one of the worst culprits).

Don't. Buy the house now and buy bits of furniture as and when they are needed /as and when you can afford them. The house price will probably rise faster than you can save 3k to buy the furnishings. You can get dirt-cheap starter kits from Ikea /Argos etc, and bin them after a year or two when you can buy nicer stuff.

The Chief

The worst thing is the shock when you move in. you'll think Christ have i done the right thing, but trust me the next time you trap off with a girl and she asks if you live with your parents and you reply 'no i've got my own place' you'll realise it was worth every penny!


I bought my house at 23yo and i did not have a pot to p*** in for the first two years but it was worth every penny!