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mortgage deposits

edited April 2011 in Not Sports Related
quick question to those who have had an experience of dealing with a mortgage or those currently saving for a property, i just want to know how much they feel the amount for a deposit should be (in this current economy) or how much they are looking to save. im currently saving for a 25% dep and just wondering what over people are also doing. im just looking for as much advice and info as possible.
ta

Comments

  • 10% is the minimum you should aim for, generally the more % deposit you have, the better rates you will get, also some banks will only on flats if you have a 15% deposit.

    If you want any more info , give me a whisper
  • edited April 2011
    Also think about new build - new gvmt initiative (firstbuy) is effectively a 10y interest free loan for a deposit (I think). Also housebuilders give similar int free loans. Shared equity with housing associations another route, you buy chunks of the property when you can afford. But you do pay a premium for a new house.

    http://www.google.co.uk/m/url?ei=pVCeTZihHIeR8wOxpf_yAg&q=http://www.homesandcommunities.co.uk/FirstBuy-schnulleme-launched&ved=0CDMQFjAH&usg=AFQjCNFllCDJ0oVmkQNZFmqen3yI0Fs91g
  • I'm also in the same position as you L Block. I've got some money coming in June which would give me close to 35% of the value of what I want to buy around the Sidcup area I think. You can get much better rate deals for 35% deposits than 25% and lower. I'm also not clear on the charges and fees I'll have to pay on top of this.

    With interest rates expected to rise next month and house prices predicted to fall this year it makes me more nervous about taking this step.

    Good luck!
  • I purchased my house in December 2009. I originally was going to put £25k down but then I opted for £40k as it saved me £7k in interest over the 3 year period of my fixed mortgage. I got 4.189 fixed with the 20%. So I would recommend going for a higher deposit if you can afford it. A big key is to leave yourself with a pot of savings if anything goes wrong with the house (boiler etc).

    I would also recommend going for the full survey, I opted for the middle one and found a few problems that have cost me money to put right. If I had gone with the full survey then I could have asked the owners.

    Anyway good luck.
  • [cite]Posted By: robroy[/cite]
    I would also recommend going for the full survey, I opted for the middle one and found a few problems that have cost me money to put right.


    Can only second that.

    Am currently paying a heavy price for not having a full survey done and thinking i'd save a few quid with just the mortgage survey.
  • Can only imagine how difficult it is these days trying to get on the ladder, but if i could offer any advice it would be where possible not to stretch yourself.

    At the end of the day, of course your home is important, but its essential you stay in a position where you can still 'live your life'.
  • Rather than a full inspection, why not take a builder with you on a second visit to a property you like?
  • I am currently looking for a deposit. Me and the partner cant save the amount required so I have a plan.

    All I need is someone to buy into the property with me and my partner. Whoever is the lucky person will pay the 20% deposit. They will then have 25% of the property for that investment. It will state in the contract that they have no responsibility for the mortgage payments or upkeep at all, would solely be our responsibility. My parents home would be used a a guarantor incase of defaulting on the mortgage to protect the investors 20%. Then in a set time 10 years, the house will be sold and the investor will receive 25% of the sale value or if both parties agree extended.

    I thought of this last week and think its a great idea......................feedback or anyone interested??
  • [cite]Posted By: C.Walsh'sLoveChild[/cite]I am currently looking for a deposit. Me and the partner cant save the amount required so I have a plan.

    All I need is someone to buy into the property with me and my partner. Whoever is the lucky person will pay the 20% deposit. They will then have 25% of the property for that investment. It will state in the contract that they have no responsibility for the mortgage payments or upkeep at all, would solely be our responsibility. My parents home would be used a a guarantor incase of defaulting on the mortgage to protect the investors 20%. Then in a set time 10 years, the house will be sold and the investor will receive 25% of the sale value or if both parties agree extended.

    I thought of this last week and think its a great idea......................feedback or anyone interested??

    not an expert but you might be better to try shared ownership with an Housing Association. It's not the same but it is similar to what you are suggesting. Try London and Quadrant or Hastings which might be more local to you.

    Good idea but:

    Legal costs. You and they would need a very tight contract

    10 years is a long time to have that money tied up for an uncertain return. Why is this a better deal than an ISA or paying a flat off plan? Most investors who aren't family will want a return over what they could get from an investment fund/shares.

    As always the Exit strategy is key. If in 10 years you don't want to move but they want their money back they could either force a sale or demand 25% of the then value. Could you pay say £50k?

    You've also tied your parents into a deal for a long period. Don't know what they might want to do during the next 10 years
  • [cite]Posted By: Henry Irving[/cite]
    [cite]Posted By: C.Walsh'sLoveChild[/cite]I am currently looking for a deposit. Me and the partner cant save the amount required so I have a plan.

    All I need is someone to buy into the property with me and my partner. Whoever is the lucky person will pay the 20% deposit. They will then have 25% of the property for that investment. It will state in the contract that they have no responsibility for the mortgage payments or upkeep at all, would solely be our responsibility. My parents home would be used a a guarantor incase of defaulting on the mortgage to protect the investors 20%. Then in a set time 10 years, the house will be sold and the investor will receive 25% of the sale value or if both parties agree extended.

    I thought of this last week and think its a great idea......................feedback or anyone interested??

    not an expert but you might be better to try shared ownership with an Housing Association. It's not the same but it is similar to what you are suggesting. Try London and Quadrant or Hastings which might be more local to you.

    Good idea but:

    Legal costs. You and they would need a very tight contract

    10 years is a long time to have that money tied up for an uncertain return. Why is this a better deal than an ISA or paying a flat off plan? Most investors who aren't family will want a return over what they could get from an investment fund/shares.

    As always the Exit strategy is key. If in 10 years you don't want to move but they want their money back they could either force a sale or demand 25% of the then value. Could you pay say £50k?

    You've also tied your parents into a deal for a long period. Don't know what they might want to do during the next 10 years
    This. In six months active trading on the stock market I've made a return of 37% (including two pretty poor market-sapping events (arab revolution, Japanese earthquake/tsunami). Why would anyone buy into your scheme - when they're likely to get much, much worse returns that that over ten years? You've not thought it through properly - look at shared ownership instead - it's much more realistic.
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  • I have investigated shared ownership and would like to steer clear from that route.

    The not moving part I think is irrelevant as we both know we would have to move so you can plan things around that, so I don't see that as being a problem.
    It is a better deal than an ISA or any other plan because they would only be paying for 20% of the property but owning 25%% of it. AND they would be helping out two very nice young people who are fed up with renting and don't have any money in the family to help out.
    I have discussed it with my parents and they are happy with being guarantors on this.

    Would I be guessing that you are not interedted Mr Irving?
  • edited April 2011
    [cite]Posted By: Leroy Ambrose[/cite]
    [cite]Posted By: Henry Irving[/cite]
    [cite]Posted By: C.Walsh'sLoveChild[/cite]I am currently looking for a deposit. Me and the partner cant save the amount required so I have a plan.

    All I need is someone to buy into the property with me and my partner. Whoever is the lucky person will pay the 20% deposit. They will then have 25% of the property for that investment. It will state in the contract that they have no responsibility for the mortgage payments or upkeep at all, would solely be our responsibility. My parents home would be used a a guarantor incase of defaulting on the mortgage to protect the investors 20%. Then in a set time 10 years, the house will be sold and the investor will receive 25% of the sale value or if both parties agree extended.

    I thought of this last week and think its a great idea......................feedback or anyone interested??

    not an expert but you might be better to try shared ownership with an Housing Association. It's not the same but it is similar to what you are suggesting. Try London and Quadrant or Hastings which might be more local to you.

    Good idea but:

    Legal costs. You and they would need a very tight contract

    10 years is a long time to have that money tied up for an uncertain return. Why is this a better deal than an ISA or paying a flat off plan? Most investors who aren't family will want a return over what they could get from an investment fund/shares.

    As always the Exit strategy is key. If in 10 years you don't want to move but they want their money back they could either force a sale or demand 25% of the then value. Could you pay say £50k?

    You've also tied your parents into a deal for a long period. Don't know what they might want to do during the next 10 years
    This. In six months active trading on the stock market I've made a return of 37% (including two pretty poor market-sapping events (arab revolution, Japanese earthquake/tsunami). Why would anyone buy into your scheme - when they're likely to get much, much worse returns that that over ten years? You've not thought it through properly - look at shared ownership instead - it's much more realistic.

    Not interested either then lol I thought it seemed like a good idea..........anyway. I am not aiming this at people like yourself who trade on the stock markets or investing here and there on a regular basis. I am aiming this at someone who either has a couple quid out aside or someone who is actively looking to put some of their money into property
  • edited April 2011
    It's easy, LoveChild.

    All you have to do is get a better job and earn more money.
    Then you and your missus have to make sacrifices and cut back on most of the enjoyable things in life, like watching Charlton play.

    And save like crazy.

    It's what most people on CL had to do to get on the first rung of the housing ladder.

    ;o)
  • ooooo........meow
  • [cite]Posted By: Oggy Red[/cite]It's easy, LoveChild.

    All you have to do is get a better job and earn more money.
    Then you and your missus have to make sacrifices and cut back on most of the enjoyable things in life, like watching Charlton play.

    And save like crazy.

    It's what most people on CL had to do to get on the first rung of the housing ladder.

    ;o)
    I didn't. But then I went down the shared ownership route. :-)
  • [cite]Posted By: C.Walsh'sLoveChild[/cite]I have investigated shared ownership and would like to steer clear from that route.

    The not moving part I think is irrelevant as we both know we would have to move so you can plan things around that, so I don't see that as being a problem.
    It is a better deal than an ISA or any other plan because they would only be paying for 20% of the property but owning 25%% of it. AND they would be helping out two very nice young people who are fed up with renting and don't have any money in the family to help out.
    I have discussed it with my parents and they are happy with being guarantors on this.

    Would I be guessing that you are not interedted Mr Irving?

    I've just put my life saving's on Peanut's tips so no.

    Trouble is if the house price stays the same I've made 25% profit over 10 years or 2.5% a year. Not a great return.

    If the house price doubles (which it could but I would say is unlikely) then it's a 5% a year return or similar to a building society account but without compound interest.

    And a lot can happen in 10 years. Kids/schools/family sickness/new jobs/etc/etc.

    I'm more worried that you are tying yourself into what could be a very tricky deal to get out of.

    What were your objections to Shared Ownership?
  • [cite]Posted By: C.Walsh'sLoveChild[/cite]I am currently looking for a deposit. Me and the partner cant save the amount required so I have a plan.

    All I need is someone to buy into the property with me and my partner. Whoever is the lucky person will pay the 20% deposit. They will then have 25% of the property for that investment. It will state in the contract that they have no responsibility for the mortgage payments or upkeep at all, would solely be our responsibility. My parents home would be used a a guarantor incase of defaulting on the mortgage to protect the investors 20%. Then in a set time 10 years, the house will be sold and the investor will receive 25% of the sale value or if both parties agree extended.

    I thought of this last week and think its a great idea......................feedback or anyone interested??
    I'd not go for it myself. From the investors point of view there's a huge risk. If you weren't to look after the property well then they might get not a lot. Obviously I'm not saying that you would do this, but you have to look for all the down-sides. Then there's the problem of what you do at the end of 10 years. Do you have to sell at a certain date? What if there's a massive crash around then? What happens if you really don't want to go then and simply set the price too high or make the property unattractive to sell? What if you want or need to move sooner? What do you do if prices don't go up much - you could end up in the same boat 10 years down the line. It's an interesting idea, but carries a lot of risks - would probably be the kind of thing that a family member or close friend might do rather than an investor.
  • This is effectively the ownership structure of our club!
  • [cite]Posted By: C.Walsh'sLoveChild[/cite]ooooo........meow

    Just tongue in cheek, Mr LoveChild (great name, BTW) ........ but it is, in fact, exactly what most of us have had to do, prior to the last 10 years.

    Up until then, you invariably needed 10% to 20% deposit, but interest rates were frequently massively higher than they are today.

    Anyway, (just for once, hehe) pay attention to Sir Henry Irving. It might be the simplest route for you.
    Otherwise, what's the rush?

    House prices don't seem set for any sort of major increase, especially with the threat of higher mortgage interest rates.
    They may even fall further. Nobody knows.

    In a couple of years, with some hard saving and perhaps topped up with a loan from family, could get you a much better deal without too much of a financial millstone around your neck.
  • [cite]Posted By: McLovin[/cite]would probably be the kind of thing that a family member or close friend might do rather than an investor.

    I can't see how a non-family investor would even consider it.
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  • edited April 2011
    As your parents appear willing to help would it be feasible for them to borrow on their place and buy your prospective property outright? If they have a small mortgage or have paid theirs off then their equity is effectively their deposit and they should be able to get a competitive interest rate.

    You and them would be named owners of the second property and you could pay them directly the amount of their mortgage payment (or agreed other amount) and they have an investment along the lines of your original idea in that they also own the second property along with you.

    You would need to all take out some sort of life insurance in case the unthinkable was to happen to any of you in order that your parents' home is protected and the mortgage repaid.

    I do sympathise though. Life as a first time buyer is hard when to get any sort of rate you need a 25% deposit.
  • Unfortunately my parents are not financially sound. Where they are only 7 years from paying up their mortgage, my father had a electrical company go bust a few years ago and is still paying it off. So where they have been told they can be guarantors, they cant help with actual money, so there is no money coming from the family side of things. I have had a look at the new government initiative and it doesn't suit is at all. You have to move into a new build flat/house as it is part funded by the builder plus you need 5% of the deposit already. My problem is that I have the money each month without fail to pay my £900 rent but there are no savings to speak of and in the current climate and the way that the construction industry is going, there is never going to be any savings to speak of. Hence the conclusion I have come to where I am looking for what I have said.
    With regards to the part buy, I have looked at it and spoken a few people. Obviously what I have asked is technically a part buy. But I don't like not being in control. And from speaking to people I know who have gone down the part buy route I have decided it is not the best route for me. Anyone got Duncan Bannatyne's email address?
  • The problem is CWLC is that you're not going to get anyone to give you what you're looking for without massive strings attached, if at all. What happens if the housing market crashes just before the 10 years are up etc etc.? If you have no deposit, then you've not got a lot of hope I'm afraid. Can you find somewhere cheaper to rent, or even move back in with your parents, and economise in other ways to help you build up a deposit?

    Seriously though, shared ownership is not at all bad. Buying and selling can take ages, as the paperwork is more complicated, and there is a more limited pool of mortgages available. However, once you're actually in a place, it's not much different from being a leaseholder in an ordinary block of flats.
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