Talking Mortgages & Deposits

*This is a collaborative post*

Dave and I have been homeowners for 6 and a half years now.  We first started to look at buying a house together when we were about 27.  We had rented for a year or so to test things out and decided we were good to go, we could cope with living with each other and we knew we were in it for the long haul.  We didn’t want to keep pouring our hard earned cash into someone else’s pockets whilst renting a property and both of us had been brought up with the expectation that we would own our own homes. 

Of course things are very different now to when our parents were first buying (aside from the fact you could buy a house for about £20k back then!) 

The biggest stumbling block for most young couples now when it comes to getting onto the property ladder is the deposit.  Gone are the days of 100% mortgages (or even a bit more so you could get set up and furnished!)  Things changed dramatically just as we were trying to buy – we had initially been told we would need a 5% deposit which Dad had said he would sort out for us (by way of a loan), by the time we got to actually buying our property we suddenly found we needed to find a 15% deposit.  15% is a lot of money – even for the run down, repossessed end terrace we first fell in love with, which we were looking to pay just short of £100k for, we would have still had to magic up £15,000 – that’s a lot of money to save up no matter how much you are earning.

We reached the point where we thought we were going to have to give up on our dream of buying as we struggled to get the mortgage and the deposit but it all came good (with more than a bit of help and support from my parents – both financially and in terms of advice and experience) and we bought our house in July 2008 . . . 

Our first home . . . Summer 2008

July 2008 – yes that was when it all went wrong and the prices plummeted.  Nice one Col & Dave.  5 years later we came to the end of our fixed rate mortgage and looked to sign up to a new one only to be told by our mortgage provider that they now believed our house to be worth considerably less than we had paid for it and whilst we weren’t in negative equity as such we no longer had any deposit left in our house.  This put us onto the standard variable rate – which costs us far more each month.  Frustrating. 

All this meant that when our home became too small for our growing family we were in no position to even think about moving – we had no equity in our home and couldn’t afford to buy a bigger house anyway.  Fast forward to now and with a two storey extension almost complete our house is,of course, worth considerably more than it was a couple of years ago.  This is helped even further by the housing market improving and a property over the road from us, with a similar extension, having sold for a really good price. (Thanks for that dudes!)  The time has come for us to look at our mortgage situation again – now that we should have a decent chunk of equity in the property we should be able to get a new fixed rate and save ourselves a few quid a month which would ease the pressure considerably.

Are you looking to get onto the property ladder, or make a move to a bigger family home this year?  We were incredibly lucky that my parents were able to help when it came to finding our deposit, I’m not sure we’d have managed to save up that amount ourselves (especially not now that we have a young family to support).  If you’ve got a deposit to save for then it’s worth knowing exactly how much you’ll need to aim for – to set yourselves a target.  TSB have created a Mortgage Calculator to give you an idea of how much you might be able to borrow, how much it would cost you each month to pay back and crucially how much deposit you’re going to need to front up.

3 Comments

  1. January 2, 2015 / 6:42 pm

    I am so glad we got on the property ladder when we did. We bought for the first time in 2007 and only made £8k on the house when we sold it in 2010 but all things considered we were lucky to not make a loss! We are now in our forever home and I am so happy to never have to move again! x

    • January 2, 2015 / 7:05 pm

      You're right, you were lucky to make anything at that stage in the game 🙂 We never bought this house to be our forever home, but it's certainly going to be a "very long time home"! x

  2. January 3, 2015 / 12:26 am

    We're in a similar situation Colette, only we can't extend. So we'll hang tight for a few more years and then move. Not ideal but at least we're not renting 🙂

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