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First time buyer advice

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  • First time buyer advice


    I'm 25 and am looking into buying my first property. I'm looking at getting a two bedroom apartment between £70-£90k.

    I currently have £14000 to use as a deposit and have an income on £17k.

    Would I have a good chance of securing a mortgage or would I be better off with a loan? As my parents have said that if required, I could use their house as collateral in order to secure a loan as opposed to a mortgage.

    Is this right or would I be better off saving a bigger deposit? All help and advice would be greatly appreciated.

  • #2
    Whatever property you are looking to buy, you should aim to be as far below 80% loan value as possible - ie, stump up at least 20% deposit, to ensure reasonable access to mainstream mortgage products.

    The trouble you have is the nervousness of the mortgage lenders, and while using your parents home to back a mortgage may be a good idea in terms of application, you need to think carefully about negative equity.

    Simply put, the UK property market is still in crash mode, and as much as 10%-20% could further disappear from UK house prices. That means as soon as you buy a property now, you're looking at the property value immediately dropping, leaving you paying for a mortgage that is higher than the house is worth - negative equity as it's called.

    You may be much better off saving for a while yet and continue to watch the market for a bottom, which would mean you would have a more secure investment in terms of equity, and a better price for you as a buyer. It would open your options for purchase and make your financial circumstance much more secure, in my opinion.


    • #3
      Some good advice from Brian here. If you currently in a position to be able to save I would continue to do so.

      There will be a multide of properties come onto the market at more compeititve prices and you may be able to pick up a house for similar prices in the future.

      The advantage of buying a house over a flat is that you would feel there would be more scope for an increase in value to a house over time as opposed to a flat as there are not really any major improvements you can make to a flat.
      Worldwide Financial Planning is a specialist independent provider of Large mortgages.


      • #4
        Repossessed Properties

        Thanks for the advice, it's given me something to think about.

        The only thing is I've recently viewed two apartments which have both been repossessed. However, I've also seen a couple of apartments in the same area which are identical to the repossessed ones but are between £20-30K more.

        I'm just wondering if I'd be missing out by waiting or is there a way that you can find out about repossessed properties as I just got lucky with the two I viewed?


        • #5
          Thanks for that - now go back to the IT department and do some REAL testing.....


          • #6
            Hi Sunny before investing any of your hard earned cash, I would recommend checking out

            Glenn Armstrong (Google him) has an amazing system where by you can buy property using none of your own money.

            I recently attended his course and learned a huge amount. By following his techniques, you will be able to grow your portfolio at a very fast rate.

            Glenn Armstrong Dot Com


            • #7
              I think you should visit your bank and see what they can offer, you will not know how willing banks are to lend you the money until you sit down and have a chat to them. I think that although it is nice to increase your LTV if you can secure a good deal on a property and a good rate of mortgage with affordable payments you will be ok. Banks are lending on 90% mortgages now.