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Aunt Sally

Help! I Just Want A Home.... Now!

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:unsure: Hello,

I would like to request some assistance - now I'm a Bear - I've been praying for a crash for about 6 years - it's hardly even been a skid, let alone a crash, in Greater London, but I am in a bit of a conundrum as myself and my Fiance are FTB's...

We currently rent a 2 bed flat in Walthamstow. We want to start a family soon and my Fiance wants to expand his business from home so we need more space and would like to buy a modest 3 bed house (preferably with a garage). We are currently in Zone 3 and want to move further out (cheaper houses) to Essex, Zone 6 but still commutable.

We are struggling to decide how to proceed with obtaining a mortgage as the market is indeed very bleak for people like us wanting to get on the ladder, we only having a modest deposit (despite saving for years and waiting for prices to fall) and so we are now at the stage where enough is enough - we can't move forward with the business or family plans until we have a Property. We need security of a stable family home for the next 5-10 years at least!

Here comes the Finance bit......

We have £30,000 deposit.

I have outstanding student loans of £400 per month

We have a current combined income of £65k pa (althoug this could increase as I have also started a business from home)

Current rent is £1,000 per month

Property values in our desired area - £220k - £250£k (average of say, £240k but open to offers below and judging by www.propertysnake.co.uk values have only fallen by 5% on the typf of house we want).

My credit is not the best (was a bad student) I have no savings and no pending inheritance

My Fiance has excellent credit

My Fiance is self-employed and has savings (not sure how much though but probably around £30k)

My Fiance also has a current 50% share in a 3 bed house with equity of around £150k (100% total value on inheritance).

Now based on the above - online calculators suggest we could borrow enough to cover the costs of a mortgage on a 25 year, repayment mortgage at 5% interest and pay around £1,200 per month - however this was the same as 2-3 years ago when we first started to keep an eye on the market! If we have had a so-called "crash" why the hell are houses still the same value and costing the same in real terms, despite falling prices and interest rates?! :blink:

We have already been told by one IMA that he only had one 90% LTV product on the market with a ridiculous 7% interest rate.

Barclays however, have said they have a lot of products available and we are seeing them next week.

HSBC looks like they have good interest rate deals on the market for 90% LTV at 4.9% (managable IMO as this was the going rate when we first started checking out the market 3 years ago). This looks like our best bet so far.

Abbey also has great offers on 5 year fixed rate FTB mortgages but with 25% deposit.

I am struggling to find any other 90% LTV mortgages....

Can someone please give me some advice as to how to play this game a little more astutely.... are we not utilising savings or the equity as well as we could be....? I'm not sure what other products are on the market and if anyone has any suggestions that would be great!

I HATE putting my personal details "out there" but would really like to pick your brains so any suggestions are welcome and appreciated - I'm new to all this house-buying marlarky! :rolleyes:

Thanks x

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You seem to be in a pretty condition all the way around. You could try and make it easier on yourself and find a house in dire need of tender loving care. A little paint, possibly some woodwork - nothing to major. Fixing up a house looks good to a bank or find one that is repossession.

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:unsure: Hello,

I would like to request some assistance - now I'm a Bear - I've been praying for a crash for about 6 years - it's hardly even been a skid, let alone a crash, in Greater London, but I am in a bit of a conundrum as myself and my Fiance are FTB's...

We currently rent a 2 bed flat in Walthamstow. We want to start a family soon and my Fiance wants to expand his business from home so we need more space and would like to buy a modest 3 bed house (preferably with a garage). We are currently in Zone 3 and want to move further out (cheaper houses) to Essex, Zone 6 but still commutable.

We are struggling to decide how to proceed with obtaining a mortgage as the market is indeed very bleak for people like us wanting to get on the ladder, we only having a modest deposit (despite saving for years and waiting for prices to fall) and so we are now at the stage where enough is enough - we can't move forward with the business or family plans until we have a Property. We need security of a stable family home for the next 5-10 years at least!

Here comes the Finance bit......

We have £30,000 deposit.

I have outstanding student loans of £400 per month

We have a current combined income of £65k pa (althoug this could increase as I have also started a business from home)

Current rent is £1,000 per month

Property values in our desired area - £220k - £250£k (average of say, £240k but open to offers below and judging by www.propertysnake.co.uk values have only fallen by 5% on the typf of house we want).

My credit is not the best (was a bad student) I have no savings and no pending inheritance

My Fiance has excellent credit

My Fiance is self-employed and has savings (not sure how much though but probably around £30k)

My Fiance also has a current 50% share in a 3 bed house with equity of around £150k (100% total value on inheritance).

Now based on the above - online calculators suggest we could borrow enough to cover the costs of a mortgage on a 25 year, repayment mortgage at 5% interest and pay around £1,200 per month - however this was the same as 2-3 years ago when we first started to keep an eye on the market! If we have had a so-called "crash" why the hell are houses still the same value and costing the same in real terms, despite falling prices and interest rates?! :blink:

We have already been told by one IMA that he only had one 90% LTV product on the market with a ridiculous 7% interest rate.

Barclays however, have said they have a lot of products available and we are seeing them next week.

HSBC looks like they have good interest rate deals on the market for 90% LTV at 4.9% (managable IMO as this was the going rate when we first started checking out the market 3 years ago). This looks like our best bet so far.

Abbey also has great offers on 5 year fixed rate FTB mortgages but with 25% deposit.

I am struggling to find any other 90% LTV mortgages....

Can someone please give me some advice as to how to play this game a little more astutely.... are we not utilising savings or the equity as well as we could be....? I'm not sure what other products are on the market and if anyone has any suggestions that would be great!

I HATE putting my personal details "out there" but would really like to pick your brains so any suggestions are welcome and appreciated - I'm new to all this house-buying marlarky! :rolleyes:

Thanks x

You would do yourself a favour by saving a little more deposit -25% would get you a much better rate AND you would have a smaller mortgage. Part of the problem is people often borrow too much, in particularly when there is a percieved 'rush' to get on the property before 'prices rise' . As most people have the desire to own their home, this creates excessive demand when credit is easy to come by- hence more price rises as potential buyers borrow more and more money to compete against each other. When credit becomes much more difficult to come by- you get the fall in house prices as people are constrained by their ability to borrow money. If you find it difficult to save more deposit- think of how long it will take you to pay off £225 k. Assuming you intend to pay off the capital in say 25 years - you should be aiming to pay of 9K capital + interest each year (on average). If you cant save 10k a year then perhaps saving a little longer and buying a cheaper property might be a better option. Lastly - what people ask for their property and what people actually get are too different matters. In my experience it is almost routine for estate agents and vendors to ask 10% more then they expect to get and in some instances much more. you should offer at least 10% lower than the asking price- its a buyers market and there are many houses on the market. Your offers will be refused by some but hold your nerve and you will get a deal.

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Oh 10% at the very,very least. It may seem a little audacious but what's the worse that can happen if you offer (say) 30 % less? They might tell you where to go. Big deal. Don't forget that when the times were good people wrere slapping on 20% (or more) increases per annum - so why wasn't that audacious? Certainly don't base anything on advertised prices, even here ooop North prices don't seem any different than they were 2 years ago. Land registry figures may tell a different story though. Many people are still fixed in the psyche of high house prices but if you base things on 'usual' (NOT AVERAGE!) earnings it should tell us where house price level should be. At least it should give a fair indication.

You also seem to base your calculations at an interest rate of around 5%. Of course there is no 'rule' that it will stay that low. 20 or 25 years is a long time and that interest rate can climb. When it does the repayments can be crippling for a lot of buyers.

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:unsure: Hello,

I would like to request some assistance - now I'm a Bear - I've been praying for a crash for about 6 years - it's hardly even been a skid, let alone a crash, in Greater London, but I am in a bit of a conundrum as myself and my Fiance are FTB's...

We currently rent a 2 bed flat in Walthamstow. We want to start a family soon and my Fiance wants to expand his business from home so we need more space and would like to buy a modest 3 bed house (preferably with a garage). We are currently in Zone 3 and want to move further out (cheaper houses) to Essex, Zone 6 but still commutable.

We are struggling to decide how to proceed with obtaining a mortgage as the market is indeed very bleak for people like us wanting to get on the ladder, we only having a modest deposit (despite saving for years and waiting for prices to fall) and so we are now at the stage where enough is enough - we can't move forward with the business or family plans until we have a Property. We need security of a stable family home for the next 5-10 years at least!

Here comes the Finance bit......

We have £30,000 deposit.

I have outstanding student loans of £400 per month

We have a current combined income of £65k pa (althoug this could increase as I have also started a business from home)

Current rent is £1,000 per month

Property values in our desired area - £220k - £250£k (average of say, £240k but open to offers below and judging by www.propertysnake.co.uk values have only fallen by 5% on the typf of house we want).

My credit is not the best (was a bad student) I have no savings and no pending inheritance

My Fiance has excellent credit

My Fiance is self-employed and has savings (not sure how much though but probably around £30k)

My Fiance also has a current 50% share in a 3 bed house with equity of around £150k (100% total value on inheritance).

Now based on the above - online calculators suggest we could borrow enough to cover the costs of a mortgage on a 25 year, repayment mortgage at 5% interest and pay around £1,200 per month - however this was the same as 2-3 years ago when we first started to keep an eye on the market! If we have had a so-called "crash" why the hell are houses still the same value and costing the same in real terms, despite falling prices and interest rates?! :blink:

We have already been told by one IMA that he only had one 90% LTV product on the market with a ridiculous 7% interest rate.

Barclays however, have said they have a lot of products available and we are seeing them next week.

HSBC looks like they have good interest rate deals on the market for 90% LTV at 4.9% (managable IMO as this was the going rate when we first started checking out the market 3 years ago). This looks like our best bet so far.

Abbey also has great offers on 5 year fixed rate FTB mortgages but with 25% deposit.

I am struggling to find any other 90% LTV mortgages....

Can someone please give me some advice as to how to play this game a little more astutely.... are we not utilising savings or the equity as well as we could be....? I'm not sure what other products are on the market and if anyone has any suggestions that would be great!

I HATE putting my personal details "out there" but would really like to pick your brains so any suggestions are welcome and appreciated - I'm new to all this house-buying marlarky! :rolleyes:

Thanks x

wonderwoman, I'm sorry to hear that the boom & bust has forced you to put your life on hold. But you shouldn't feel that buying a house is a necessary precursor to starting a family. It isn't, and there's no longer any social stigma attached to renting now that the house price bubble has burst. If security of tenure is the issue, you could look into getting a long let. A two-year tenancy is enough to get settled and have a baby or two.

The problem is that house prices do have further to fall and you'll burn your fingers by impatiently jumping into the market too soon - an especially dangerous thing to do if you need a mortgage. The only situation in which anyone should consider buying a house at the moment is if they can buy outright for cash, and even in that case the figures still don't stack up well.

Because of the emerging problems in bond markets and rising inflation expectations, mortgage rates are going to start rising over the next year or so - possibly very sharply. That's going to choke off demand for houses and push prices down, so we'll see another leg down in the crash.

My advice is to think outside the box. Find a long let on a nice house where you can start a family and start businesses. No point delaying either of those - life is short. But stop worrying about becoming a home-owner. There's no chance you'll get left behind by rising prices in the next decade, and you'll almost certainly give your kids a better start in life if you rent for a few years and let house prices come back down to sustainable market levels.

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You need to talk to the right people, get all the best possible advice, drive around the area you want to live in and view some properties. Then you will have an idea of what you want to spend (what you get for your money) and how much you can spend. I think knowledge is key in this instance.

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I'm a bit puzzled - you say you and your fiance have a £30k deposit. You also say that your fiance has some savings, probably about £30k. Does this not mean you have, together, £60k? Hence should be able to get a 75% LTV mortgage? Also, I am a bit concerned that you are unsure how much savings your fiance has when you are about to commit to a £220k purchase.

I would agree with copernicus' comments. You do not need to own a home to start a family and I suspect house prices have a long way to fall. You say you have been finding it difficult to save for a deposit on £1000 rent, yet the mortgage would, at current interest rates would be £1200 and interest rates may very well rise significantly in the nearish future. How would you cope with a mortgage of £1500? £1800? £2000? Furthemore,you are planning to start a family which has all sorts of direct and indirect expenses associated with it e.g. childcare costs or you will have to leave/reduce work - either way you will suffer a drop in earnings. One the face of it, it seems like you would be taking a great financial risk. Finally, whiy is ownership of a property required to "move forward" with the business. I run a business from home, and I rent.

Just a few things for you to ponder.

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