Home Home, Law & Money
If you need urgent support, call 999 or go to your nearest A&E. To contact our Crisis Messenger (open 24/7) text THEMIX to 85258.

Question about houses.

Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
Say when I finished university, and want to get on the property ladder without renting, there are some questions I want to ask.

What does 100% mortgage mean?

If I was earning say 15k, what is the maximum mortgage I could get?

Same with 25k and 30k (not going to get either of them :p but curious)

It's just, at uni and before you don't really think about owning your own home, but now I'm considering what am I going to do when I finish uni... and it seems a practical impossibility to buy. But renting is in a sense 'dead money' because I'm just paying someone elses mortgage. There's always the possibility to buy with other people, but then one day I still do want to have my own 'place'. Even if it's just a one bedroomed apartment (preferably with parking spot tho).

Luckily, I hope to avoid living in london for the rest of my life, so whilst I won't earn silly money, I wont have to pay it either. Just how feasible is it for someone to own their own home frmo uni these days? :(
«13

Comments

  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    ShyBoy wrote:
    What does 100% mortgage mean?

    A mortgage to the value of the property (no deposit).
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Shyboy - without a deposit the maximum you're likely to get on £15k is approx £45k. Without a deposit, 3 x your salary is quite often the upper limit a lender will give you. You may get a 3.5 x multiplier, but that is rare. For any salary, just apply the same multipliers.

    You're going to need an 11% deposit to avoid higher lending fees, and a minimum 5% to start to get better multipliers.

    I'd like to put this another way as well - which I only realised after speaking to a friend of mine who was very high up at HSBC before he retired... Dead money? How about the masses of interest you're paying to the bank? That is also dead money... Horrible to think, but so very true.

    It could be the case, but you may have to go for an interest only mortgage - in which case you will need to find alternative ways of actually bringing the balance of the mortgage down. Interest only is the type of mortgage that many investors go for (myself included).

    With the prices going the way they are, you're most likely going to have to get into a group mortgage, which is always slightly tricky for a long term arrangement.



    G.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    At the rate we're going, by the time I've saved a small deposit, a shithole will cost over a hundred and fifty grand.

    I'm still hoping they fall significantly (or at least stagnate until general inflation catches up).
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    .
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    What other expenses are there when you buy a house? I don't mean stuff like buying a washer and fixing the drains, I mean to actually get the house in the first place

    I was having a look online today and there were some nice looking, small-ish houses, but 2-3 decent sized bedrooms for £50-£70k. All with hideous wallpaper and flowery carpets but that can be sorted! :D
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Def with what the other guys are saying. It might be a good idea to start your research after university so you get a better idea of the picture then, and in the meantime as GWST said, get to grips with your life and finances so it's not such a big shock when you buy.

    Also, in your research, you have to think about a schedule to set things in motion i.e. getting your finances in order, your credit, the type of mortgage you want, considering university debt, getting pre-approval - there are so many things to consider before even thinking about stressing yourself with looking for a place (my partner and I are looking to buy, and trust me, it can be a pretty frustrating process). Not to mention the fact that you get strain for all the eyerolling when you see a fucking garage going for £20,000. :grump:
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    .
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Well, I could rent after uni, probably in a houseshare as it's cheaper, but would eventually want to move out. I just thought, it looks to be in 5 years time that I'll be completely priced out of the market, I may never own my home because most of the accomodation in the coutnry will be owned by buy-to-let lenders.

    So, more deposit the better for a mortgage then? I can get a fixed sum together, I don't need to get anything straight away. Just would like to *one day*. I'm saving £500 per term now, it goes straight into my savings account, so by the end of uni I'll have £4.5k + whatever interest (I cant remember if it was 4 or 5%. It's pretty good tho. Not tax free, mind). So say for arguments sake £5k. That's not going to get me very far, but on £15k I reckon I could rent and if I lived quite frugally, could get by on 2.5k on food / leisure / utility bills (not council tax), then whatever the cost of accomodation is + car. So in 2 years could have saved £20k. I guess that's still not going to get me anywhere substantial though.

    :grump:

    What do you think the job prospects are for an actuary in hungary?
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    kangoo wrote:
    What other expenses are there when you buy a house? I don't mean stuff like buying a washer and fixing the drains, I mean to actually get the house in the first place

    Solicitor's fees.
    Valuation / Survey fees.
    Searches etc. (Sometimes lumped in with solicitor fees)
    Insurance.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    .
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Mist wrote:
    Solicitor's fees.
    Valuation / Survey fees.
    Searches etc. (Sometimes lumped in with solicitor fees)
    Insurance.

    How much are these likely to cost?

    Shyboy, if you're buying and living on your own then don't forget you won't be needing a 3 bedroom house! Although personally I wouldn't buy until I was ready to settle down, which I plan to do next year with my boyfriend
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I'm not sure about the ShyBoy's perspective, but the biggest problem I have with renting is the fact that there's no stability with 6 month/1 year renewable tenancys. That and the fact that it's very restrictive (as you'd expect) what you can do with the place, and can be hard (or impossible) to make it a home.

    It's useful if you don't want to stay somewhere long, but otherwise I find that it's a pain.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    You also needs to consider stamp duty - which depends on the type of property your buying but it can also mount up!

    But i would budget at least another £5k on top of your deposit - for "incidentals" which you cant' add onto your mortgage.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I think what you're projecting is very unrealistic. If you are earning £15k a year and you are house sharing then you'll be able to afford to live, and that's pretty much it.

    Why the obsession with overstretching yourself to buy a property? If you can't afford one in 5 years then wait. You don't HAVE to buy a house - millions of people don't and get by fine.

    Want to get on the property ladder as then hopefully the rise in value of my own house should to some extent offset the rise in value of a bigger house for that 'one day'. It's not that I want to overstretch myself, but I do want somewhere to call home. £15k a year will only be my expenses? I'm surprised that money doesn't go further really...
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    ShyBoy wrote:
    £15k a year will only be my expenses? I'm surprised that money doesn't go further really...


    Mate - you have NO idea, these days :grump:

    If you're earning £15k, you will take home perhaps £1k a month. Fork out rent and bills at (in London, anyway) around £450/month and that leaves you £550 to live on/pay any student debts etc.

    £140 a week is NOT a lot to get by on, when you start to factor in things you may want: New TV/laptop/holiday/nights out etc etc etc

    By GOD you're in for a shock...
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I would think that £15k would go further, because as a student I'm living on 5K a year MAX and I'm paying £250 a month for rent. Which is what you'd pay monthly on a morgage for a small place. I'd say it'd just be hard getting enough money in the first place to buy the house, and making sure you have enough for any big things that go wrong with the house
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    kangoo wrote:
    I would think that £15k would go further, because as a student I'm living on 5K a year MAX and I'm paying £250 a month for rent. Which is what you'd pay monthly on a morgage for a small place. I'd say it'd just be hard getting enough money in the first place to buy the house, and making sure you have enough for any big things that go wrong with the house


    Things are completely different as a student.

    Really it's also not the same to just quantify rent=mortgage payments either, because, unfortunately, it doesn't work out as easy as that.

    How much are the fees likely to cost? Well, it varies - rough guides though -

    Solicitor - maybe 400-700
    Valuation / survery fees - between 250 - 1000+ depending on type
    Searches - if not included in solicitor fees, probably 200
    Insurance - I guess around 200-300 / year
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    kangoo wrote:
    I would think that £15k would go further, because as a student I'm living on 5K a year MAX and I'm paying £250 a month for rent. Which is what you'd pay monthly on a morgage for a small place. I'd say it'd just be hard getting enough money in the first place to buy the house, and making sure you have enough for any big things that go wrong with the house

    It might do in Wales. Is it still cheap?

    I found it an alrightish amount around here, but houses/flats even in the warzones are extortionate.

    Saving for a deposit sounds like a right twat, although if there's two of you, it should be a bit easier, as you can share a 1 bed place to rent and buying food for two is cheaper.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    kangoo wrote:
    I would think that £15k would go further, because as a student I'm living on 5K a year MAX and I'm paying £250 a month for rent. Which is what you'd pay monthly on a morgage for a small place. I'd say it'd just be hard getting enough money in the first place to buy the house, and making sure you have enough for any big things that go wrong with the house



    Erm - how small a place do you think you would get for £250/a month on a mortgage?!?!?!?!?!?!??!?!??!?!?!?!?!

    One of my mortgages is interest only (investment), and is for £155,000 (I put a decent deposit down). The payments are just shy of £700 a month. They would be approx £1k a month on a repayment mortgage.

    I'm sure there must be at least SOME where reasonably priced left in the country, but £250 a month on a mortgage? Without sounding too patronising or scoffing too hard, I honestly don't think so! :no:

    I would like to be proved wrong, of course...
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    g_angel007 wrote:
    £140 a week is NOT a lot to get by on, when you start to factor in things you may want: New TV/laptop/holiday/nights out etc etc etc

    £140 a week spending money!! I should be so lucky! I'm looking at about £60 a week at the moment after rent, and that includes my bills!! If you want a new laptop or a holiday then you save up for it - same as I do now. Its not the end of the world. I'm sacrificing a laptop and I haven't had a holiday for 4 years to save up for buying next year. That's life. If you'd rather have a holiday than buy yourself somewhere to live and an investment for the future then more fool you

    g_angel007 wrote:
    By GOD you're in for a shock...

    Don't be so patronising. He's a student, I'm sure he knows what its like to have no cash!

    Shyboy, aren't you in 1st year? I wouldn't worry yourself about buying a house yet, its still a long way off! I think coming out of uni is a good time to start looking to buy - although I can appriciate it may be very difficult financially. When the time comes talk to your bank etc etc and see if its doable. If it isn't, you'll just have to wait until you can afford it unfortunatly
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    g_angel007 wrote:
    Erm - how small a place do you think you would get for £250/a month on a mortgage?!?!?!?!?!?!??!?!??!?!?!?!?!

    My boyfriend's dad pays £300 a month and he's got (what I would consider) a reasonably sized 3 bedroom done up lovely. For a small one bedroom I'm sure you could pay a little less on a morgage. But he doesn't live in the city
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    It might do in Wales. Is it still cheap?

    The valleys are lovely and cheap which is why I'm hoping to move up there next year! Cardiff is extortionate though! :no:
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    g_angel007 wrote:
    I'm sure there must be at least SOME where reasonably priced left in the country, but £250 a month on a mortgage? Without sounding too patronising or scoffing too hard, I honestly don't think so! :no:

    It's a shithole, and in Dewsbury, but http://www.rightmove.co.uk/viewdetails-13395208.rsp?pa_n=1&tr_t=buy

    52,000! About 300 quid on a mortgage.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    .
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    kangoo wrote:
    £140 a week spending money!! I should be so lucky! I'm looking at about £60 a week at the moment after rent, and that includes my bills!! If you want a new laptop or a holiday then you save up for it - same as I do now. Its not the end of the world. I'm sacrificing a laptop and I haven't had a holiday for 4 years to save up for buying next year. That's life. If you'd rather have a holiday than buy yourself somewhere to live and an investment for the future then more fool you

    I was attempting to point out that £140 a week doesn't go a long way by throwing some variables into the equation. Sometimes you have to do that as life isn't so straight-forward and sometimes saving isn't an option if you need something. Then we get into the whole topic of credit - which is a different kettle of fish.

    £60/week? Well done. Not a single person I know could live on that.

    Don't be so patronising. He's a student, I'm sure he knows what its like to have no cash!

    I wasn't - I was stating a fact. Also - I've never met a student able to save £500 a term as he states he is. He can't be THAT hard up, girly.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    some good advice here, you can't just compare renting with a mortgage because there are lots of other variables - council tax, repairs, state of the general economy to name a few....i don't know where you're planning to buy but £15k/pa won't get you a crack den in middlesborough these days, sure there are lots of ways around that and you can find a subprime lender who's happy to take your money, but you have to balance your fear of rising house prices (what goes up must come down btw, just look at the US atm, there are a lot of sound economic arguments that we aren't far behind..) against the flexibility that renting gives you. if i'd bought after graduating i wouldn't have been able to jump around london to better jobs and ultimately would have been worse off financially.....enjoy your youth there's plenty of time to get saddled with a load of debt when your a bit older and wiser....and maybe by then house prices might have come back down to earth, stranger things have happened.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    With an average 25 year length repayment mortgage at an interest rate of 6% you would have to have a mortgage of under £39K to have repayments under £250 a month.

    As a student you don't have to pay council tax, which is usually an average of about £100 a month. Unless you don't mind living as a student forever - ie. living in shitholes, sharing with umpteen others, eating cold beans and so on, you will not be able to live on £5K a year. Your £250 PCM mortgage alone would be £3K a year.


    Exactly.

    I haven't seen a complete property on the market for that little in years - only a few 'shells' and places that need so much work you'd need to invest many thousands to get them up to scratch...

    Things just cost more when you're not a student, no matter what you do.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    It's a shithole, and in Dewsbury, but http://www.rightmove.co.uk/viewdetails-13395208.rsp?pa_n=1&tr_t=buy

    52,000! About 300 quid on a mortgage.


    Lol - it's no palace, but it is cheap.

    It's still not £250 a month though and by the time you'd done tidying it up, well........ ££££££

    Add your insurances, council tax etc etc and it soon starts pushing the price up.

    G.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Duh I wasn't saying I was going to live on 5k a year, I'm saying I do now so surely earning 15k would be easier! I pay £250 a month now and my annual income is only 5k!

    Yes £60 a week is shit but I haven't got any more money so I have no choice

    Maybe I was underestimating £250 a month, but even £300 a month isn't bad - especially when there's 2 of you! I was just pointing out that there's no need to kill yourself paying a morgage because it doesn't have to be that expensive - as you can see by my boyfriend's dad. It obviously depends on where you buy and the price of the house. We're looking at 50k-60k for a house next year

    I only get £1500 a term so I would definatly not be able to save £500 a term!!
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    kangoo wrote:
    My boyfriend's dad pays £300 a month and he's got (what I would consider) a reasonably sized 3 bedroom done up lovely. For a small one bedroom I'm sure you could pay a little less on a morgage. But he doesn't live in the city


    Is this a recent purchase? I would suggest not unless it's VERY cheap out there...??

    When I started paying my mum's mortgage (she is very ill) it was only £220/month as the house had been bought years before. The house is worth about £170k now and so a mortgage on that would be about £1k on a repayment mortgage with a 10% deposit put down.
Sign In or Register to comment.