First time buyer (Couple) questions

KpsCowley

Hi Guys,

So as I understand it, the new legislation allows a first time buyer to get the first 220k of their mortgage at a 10% deposit rate, and any amount greater than that at a 20% deposit rate. So a second time buyer will have to pay a flat 20% deposit on any amounts.

Assuming that the above is correct, my question is:

My partner and I will be getting married in August. Presently we are looking for a starter house in the 100-150k range. We both have incomes and could get approval for this amount independently. Therefore I was thinking. If my partner solely buys this first house and we end up paying 10% deposit on a 150k mortgage. Then in another 5 years time (we will be married) can I buy a larger house for say 250k as a first time buyer or would I be seen as already being part of a house purchase?

This new 20% is crazy... and they talk about stimulating the economy.

Any help clarifying the above would be greatly appreciated thanks.

Baby01032012

KpsCowley wrote: »

Hi Guys,

So as I understand it, the new legislation allows a first time buyer to get the first 220k of their mortgage at a 10% deposit rate, and any amount greater than that at a 20% deposit rate. So a second time buyer will have to pay a flat 20% deposit on any amounts.

Assuming that the above is correct, my question is:

My partner and I will be getting married in August. Presently we are looking for a starter house in the 100-150k range. We both have incomes and could get approval for this amount independently. Therefore I was thinking. If my partner solely buys this first house and we end up paying 10% deposit on a 150k mortgage. Then in another 5 years time (we will be married) can I buy a larger house for say 250k as a first time buyer or would I be seen as already being part of a house purchase?

This new 20% is crazy... and they talk about stimulating the economy.

Any help clarifying the above would be greatly appreciated thanks.

Is it not 220k being the value of the house rather than the mortgage?

Anyway, if you are married and your partner already has the house she bought for 150k then ye will not be treated as first time buyers for the second house.

Why is 20% crazy... Why is expecting to own a second home with only 10% equity seen as crazy. 2007 is long gone.. That was the craziness!

KpsCowley

By the second house I don't mean to suggest owning two houses at the same time (I wish)

We would have to sell the first to capitalise the second, in the sense of moving to a better house (rather than owning two).


On to the 20% crazyness. For a nice family 3 bed house of 200k value, a person would need 40k savings! Who has that?
So in turn this would take money out of the economy as it will be stagnating in savings accounts of people trying to achieve the new 20% deposit rate. The Government has been trying to achieve the opposite of this over the past few years. As I see it this a step to stop people financially overextending themselves, but surely more stringent bank stress testing would be more targeted?

cat123456

We were thinking of this too and abandoned the plan. As far as I know once you get married you can't do this because you will pretty much own half that property. Legally it will be a marital home. You couldn't really say on the form that you have no other properties. If you put off getting married you could do it no problem. Also the bank will spot it on your bank statements that you are contributing to a mortgage and other house stuff. Another thing to note is that you won't get as large a mortgage yourself as you would together.

Jen44

Once your married you will not be considered a first time buyer. I bought a house on my own before me and my husband were married, like yourself naively thinking i could sell it in five years and we could buy together. 10 years on and we are only buying the second house now, we have to keep the first house and rent it out as it is still in around 20k negative equity 10 years on! If you are getting married then why would you not just buy the bigger house you want now with your salaries combined. Banks are willing to work on the LTV rate based on individual circumstance so long as you are only looking for an exemption on one of the new rules i.e you must be looking to borrow no more than 3.5 times your salary.

Baby01032012

In terms of capitalising in 5 years... Who knows... Prices could be down again...unable to sell..I'm negative equity...one or both lose job..no deposit. Buying a starter home can be a dangerous thing as you may never move on from it. Better to buy a home you will live in longer term...when you have kids etc. better to wait and save rather than buy now because that is what you can afford.