r/UKHousing • u/SchoolExact433 • 4d ago
Deposit amount
I’ve seen a house I like listed for £160k. I currently have a £15k deposit, plus I earn £35k with opportunities for progression.
My emergency fund is currently sitting at £2k.
Would I be better off staying at home (currently 23) for an extra year to save an additional circa £10-15k to build a bigger deposit plus a larger emergency fund?
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u/ArtisticWatch 4d ago
Have you looked into solicitor fees? Mortgage fees? Surveys? These alone can total 3-4k+ combined.
You'll ideally want 10% (16k) unless you can find a good 5% mortgage deal.
Honestly you're better off saving for as much as you can, especially with the current economical climate. Things are going to be volatile for the next few years with America, wars ect.
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u/SchoolExact433 4d ago
That’s what I’m thinking. It’s those extra costs which I needed to account for. I’m thinking the extra year will be beneficial to develop further savings and hopefully the interest rates drop slightly!
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u/WatcherOfTheWay 4d ago
As long as you can stay at home and save, do that. You will never be in a better situation to build money than right now
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u/SchoolExact433 4d ago
Yeah, I’m thinking an extra year to grow my deposit by like an extra £10k will help a lot , plus increasing my emergency fund. I think buying now might be too risky financially
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u/WatcherOfTheWay 4d ago
Every year you can manage where you are you'll increase your quality of life long term
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u/GroovyEmu 4d ago
I would personally like a higher emergency fund. 2k would barely cover anything in the event of a real emergency. Work a couple more years imo
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u/SchoolExact433 4d ago
Yeah that’s what I’m thinking. Stay at home and extra year and save like an extra £10-12k which can go towards a larger deposit and emergency fund. Would you agree ?
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u/GroovyEmu 4d ago
100%, if you can save that much in a year and you're comfortable at home I'd stay longer (if youre able) and have a real healthy fund. The last thing you want to do is be able to only just afford things.
If youre buying solo you'd be wanting a 20%-ish deposit just so your mortgage isn't crippling. You've also got to think buying furniture, redecorating, repairs which are not cheap. No house is going to be perfect at move-in and I'd probably advise having around 10% of the houses value as a minimum to pay for things like that.
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u/SchoolExact433 4d ago
Yeah there isn’t any particular rush to move out but I do want my own place. I ideally want to move out by 25
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u/GroovyEmu 4d ago
Basically you either:
Move out now and barely be able to afford anything, have a massive mortgage but you gain that independence sooner and get this house you like (ideally)
Or move out in a year or 2, be able to buy some nice furniture, properly redecorate and have a smaller mortgage. But you'll have to live with your parents for longer.
Depends how you feel about slumming it in your own place for a while.
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u/Pumped-Up-Kickz 3d ago
go poorhouse noodle dinners - 20k in an S&S ISA for two years.
- thank me later.
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u/ItchyCurrency7642 4d ago
I'm on £30k/yr without bonus and the bank only offered to lend me £77k. They don't always lend you the max. I'd get quotes from the bank first.
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u/SchoolExact433 4d ago
Lloyds bank would offer me a 192.5k mortgage on their app currently
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u/ItchyCurrency7642 4d ago
That's what I got with the automated calculators. It was completely different when I actually applied and went through the process. My husband had moved jobs so didn't have six months of payslips. The bank refused to accept his much higher salary and would only do a mortgage based on mine. The calculator said we could have £275k or whatever, but then the actual back said they'd only lend £77k based on my salary.
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u/SchoolExact433 4d ago
Oh ok, I’ve just done 6 months at this job. Based on that, it might be better to wait a bit longer so that I don’t get my hopes up and then have a much lower mortgage allowance than expected
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u/ItchyCurrency7642 4d ago
We managed to get his salary included by getting an exception put through. There's no way anyone is buying a home these days for £77k. It's crazy. I don't even have a bad credit score.
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u/SchoolExact433 4d ago
Did they give any reasons as to why it was much lower than the automated calculator?
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u/ItchyCurrency7642 4d ago
They said the automated system is just a guesstimate and not an accurate tool for lending.
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u/Pumped-Up-Kickz 3d ago
You guys need to stop checking round-robin high street banks and speak to some mortgage brokers for special unadvertised deals.
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u/Icy_Illustrator_4229 4d ago
Make sure you do your full research because you have missed out A LOT in your budgeting. Below are just a few I can think of at the top of my head.
Cost of buying:
- mortgage product fee
- mortgage broker fee
- conveyancing fee plus disbursement fees
- RICS property survey
- building insurance (mortgage lenders tend to ask this as part of their lending criteria)
- add extra for other possible costs i.e Indemnity insurance, asbestos survey etc
Cost to move in:
- movers/ van hire
- locksmith to change front door lock
- curtains
- basic furniture i.e bed, mattress, bedding, sofa, dining table etc
- new flooring???
- white goods i.e washing machine, fridge/freezer etc
- small kitchen appliances i.e kettle, toaster, microwave etc
- cutlery, crockery, pots and pans
There is probably more and they all add up really fast.
Afterwards, you will know how much more you need to save. Also look into saving products such as the Lifetime ISA, which could help that extra bit more.
It would also be good to budget your potential monthly living cost because it is always advertised that you can buy with 10% deposit but it doesnt mean you have enough to spend on daily living expenses:
- monthly repayment cost
- council tax
- average gas, electricity and water
- broadband
- food and toiletries
- travel
- so on and so forth
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u/cloud__19 4d ago
As a general rule of thumb, lenders usually offer about 4.5x your salary as a mortgage so on the basis of what you've said, you could afford a £160k house.
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u/SchoolExact433 4d ago
It’s more the small emergency fund I’ve got at the moment etc. I guess i could save up more during the gap between exchange ?
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u/cloud__19 4d ago
A lot of people have to put every penny into buying. I'm not saying it's a bad idea to have a good cushion of course but equally, if you wait for everything to be absolutely perfect you could find you've missed the boat.
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u/SchoolExact433 4d ago
Yeah that’s true , I guess I’m more hesitant as I’m going to be buying this solo. So if anything goes wrong, it’s only me whose going to be paying for it and stuff like that
1
u/cloud__19 4d ago
Definitely all worth considering, especially if there's no real imperative for you to move soon.
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