Advice on moving out of home

[silence]

Hello
I’m looking for advice on possibly moving out of home but I am totally clueless about a lot of things.

I’m 34 and live with my mother. I want to bring the subject of moving out to her but not really sure where to start or even how to broach the subject. I don’t want to sound stupid and have her laugh at me for thinking I could afford to move out on my own. It is just the two of us now and I’m not sure if she likes me being here or not, I don’t know if she’ll be upset or jump at the chance of getting rid of me! I pay her £50 a month I also pay for Netflix/amazon/nowtv.

I know there are personal finance groups I could ask but that seems pretty intimidating and I don’t want them to judge me.

My salary is around 19900 a year and have over £50000 in savings. I’ve tried doing mortgage calculators online and it just really confuses me! I have a car I brought for £3000 last year and a student loan.

I know there’s the help to buy scheme but I don’t know how to start applying and that and other mortgage appointments with the bank terrify me.
I’ve no idea if I’m in any position to buy. I guess I live in a fairly expensive area and I’m fussy about where I would live. I don’t want to end up somewhere I’m not comfortable otherwise I’m worried I won’t leave the house. I also want off road parking as I’m a nervous driver/parker.
I’ve been watching some property sites and I’ve found some places I wouldn’t mind living but they are around £125000 which seems a lot especially for tiny 1 bedrooms. I just don’t know if I’m being delusional in thinking I might be able to cope on my own. At the moment I feel like I can’t move on with my life unless I move out but maybe I'm better off where I am and just have no life.

I’m going to start saving a bit more each month. I understand mortgage companies look back at 3 months of statements to decide on how much money to give and I’ve probably spent too much recently. Any hints or tips I would really appreciate. Thanks

[Toxic]

As far as I'm aware you can get 4x your wage as a mortgage?

so a bank would only be happy lending you about 80k but plus your 50k it should mean you can probably get the 125k area your looking at. (unless its changed now!)

My mate just got a mortgage and took out a silly long one, like 35 years..but then hammers the overpayments as much as hes allowed, he will have paid the whole thing off within about 10-15 years. Guess thats quite a sensible approach, gives you some flexibility if money is tight and allows you to chuck more money at it when your able to instead of being pressured to find a hefty % of your income which could cause trouble if you had a gap between jobs or so!

[Schmosby]

I tried to buy when I was younger, but as I had always been sensible with my money, there was no credit history for me, so I couldn't get a mortgage.

I don't see any issues with you being able to afford the property, but you might need to try to get your mum to buy with you, assuming she already owns her property in order to get a mortgage.

[Schmosby]

I hadn't payed many bills, I'd always used payg phone, not had any credit. Other than that the above applied.

[anewyear]

Originally Posted by s_c

It's understandable that banks would be wary of lending people tens or hundreds of thousands of pounds when there's no evidence that the person is able to pay it back though.

Schools really should focus on teaching kids practical life lessons such as credit ratings, personal finance, mortgages, etc. It's a nightmare having to learn about all that stuff on your own when you're an adult, usually later than would have been useful.

Schools are starting to do this now. My son (14) has literally (last Friday) sat a test from the London Institute of Business and Finance. He's the least mathsy type person you can think of so it's good that schools are opening this out to all. It includes things like seeing the APR on credit cards.. not necessarily worrying about the detail of how that works but just knowing a low APR is good, a high APR is bad.

Link to the website page didn't work but it's the "lessons in financial education (LIFE)" bit on libf.ac.uk

[anewyear]

Silence - my guess is that a mortgage lender would be pretty happy offering you a mortgage as you'd have a fairly good "Loan to Value" (LTV) ie: the loan they would need to give would be quite low compared to the value of the property, because you are able to put down a decent deposit.

I'd say start by looking around Martin Lewis' website moneysavingexpert.com

It will give you enough pointers on the basics of how these things work before you approach a mortgage lender, if that's what you decide.

When you decide to formally start moving forward then maybe start with a chat with your own existing bank as they will have the visibility of how you've managed finances in the past so you are not starting the conversation from zero. But just be aware there could be cheaper options on the market so that'd be a starting point but you should still shop around.

Good luck...!

[choirgirl]

Gosh! I wish I'd been in your position at 34! My own fault I wasn't of course.

Maybe speak to a mortgage broker?

I had a read on this site the other day. I can't recommend them, I've only browsed the site. Quite useful background info.

https://www.onlinemortgageadvisor.co...yer-mortgages/

I think what's hard nowadays is that people are moving out later once we've got to the more cautious stage in life. I'm struggling with that myself. When you're young you are just champing at the bit to get some more independence.

[silence]

omg thank you all that's extremely reassuring. I'm going to look through all of our advice. I've no idea about credit ratings I do have a credit card which I used to use a lot but I would always pay it off automatically with my debit card. I have been in my overdraft before. Again its something I don't know a lot about so I will definitely look into it.

Yes my mum owns the house the mortgage was paid off a long time ago. I don't really want to bring it up but also I do think I should be owed a bit of inheritance

and I think I have a plan for bring up the subject I'm going to give my mum the £50 for the month and then mention that I'm going to start saving for a property and hopefully she will take the bait. I can't think of any other time to start the conversation! Maybe I can get my life going by 35

[newbs16]

Does the fifty pound you pay cover all bills and food?

At the moment it sounds like you don't have many outgoings, would you manage at you would be need to pay for all the bills, you would have mortgage, council tax, insurance, gas, electric, water, TV and food to pay for.

[Franz of Franzylvania]

It might be worth putting some of your savings in a LISA, as you can subscribe up to £4000 a year and the government will give a bonus of 25% on whatever you put in. You can open one until your fourtieth birthday and keep adding to it until your fiftieth. You can only withdraw it for a property purchase or retirement though, otherwise you'll be charged, but if that's what you're saving for anyway and you can spare the funds, it's worth considering.

[newbs16]

I would also recommend anyone that could afford it to get a first time buyers isa, the government add 25% if you buy a property and if you don't it's a good way of saving money. The interest isn't amazing but a lot better than most banks and you can remove the money whenever you want to.

[Franz of Franzylvania]

^ that's a really good point, especially if there's a chance you'll need access to the money for something else. Might need to be quickish though as help to buy isas won't be open to new savers after 30/11/19. But you'll still be able to contribute till 2029 if you open one by then.

[Aelwyn]

Originally Posted by newbs16

Does the fifty pound you pay cover all bills and food?

At the moment it sounds like you don't have many outgoings, would you manage at you would be need to pay for all the bills, you would have mortgage, council tax, insurance, gas, electric, water, TV and food to pay for.

Yes this is important. Plus the unexpected repairs and replacements that are always needed. You do need to work things out carefully, better to save for another year or two than run into problems.

It sounds as if a full and open conversation with your mother would be a very good idea.

[Toxic]

I have a pretty decent credit rating, I suspect its because I've had credit cards since I was 18

I have a friend who even struggles to get mobile phone contracts because they are very much in the mindset of if you can't afford it you don't buy it (can't knock it!)..so when they do purchase something large its just straight up in cash.

The LISA thing is also a good shout, I've got the 4k a year going into that which the government turn into 5k providing you spend it on a house (or leave it till your 55 or something?)

[silence]

Yes my mum pays all the bills I***8217;ve never had to do anything like that. The £50 is just a gesture and it was all she ever asked for. A mortgage and bills would be a big shock to me. When I lived out of halls at university it was all included in the rent.

My outgoings at the moment are just car really. I don***8217;t eat out much or spend a lot of money on nights out or going on holiday. The only thing that really reassures me is if I mess up with my money I could probably move back home!

I***8217;m reading about the different ISA types The LISA seems the better deal but I don***8217;t know if I can wait a year which makes me lean towards the help to buy. I didn***8217;t know about it closing so I***8217;m really glad I didn***8217;t put this off any longer. I know I definitely want to use the money on a house. My mum and gran were talking about help to buy a while ago because one of my cousin***8217;s children wanted to get one which made me feel unaccomplished as she is MUCH younger than me! If I could get myself sorted in 6 months that would be great. I will check out the website linked.

I actually just got a letter from my bank telling me they are not going to renew my credit card as I haven***8217;t used it for a while***8230;so I***8217;ll change that but yeah the system doesn***8217;t make much sense. It should be good I've never had to resort to credit! I used to use the credit card for purchases on the internet but debit became so much easier. So if I change things like my phone (I***8217;m with giffgaff so not a contract) and subscription payments to credit card and then have it automatically paid off using my debit card will that count or is it not enough?

Ugh I***8217;m sure when my sister brought a house she made it seem so easy although she was buying with a partner.

I just don***8217;t know how people can afford to do this!

Thanks again all I never expected so much help.

[newbs16]

^ Thank you for asking these questions I've found the answers very useful.

[genovese]

The mindset of "If I can't afford it I'm not gonna buy it" is sound
However, if in the future you're gonna want a mortgage, mobile contract, buy now pay next year offer, etc, - and as said above - you gotta start playing the game beforehand, in order to open those future financial product doors

Use your credit card (not debit), even if's just a tenner a month at tesco or whatever
Then pay it off in full when the bill comes
You're building up your history of payments which incrementally elevates your credit score/credit worthiness
It's that history which lenders look at to evaluate if they'll accept you

The mistake most people make, and basically the essence of credit that's pushed at all of us, is over extending yourself and buying loads of shite and only making the minimum monthly payments, or not making any payments at all
That's just a massive downward spiral to credit hell

There is zero shame is asking questions about this stuff
No one can know everything
As people have said, definitely start reading articles on www.moneysavingexpert.com
They explain stuff on there really clearly & concisely

Definitely get the help to buy isa
And start using your credit card
Go take a look at your credit file at somewhere like noddle, clearscore etc (info about that on above website)

And lend us a tenner guv' !

[Schmosby]

Oh that reminds me, I've been meaning to post this for a while.

You can get full access to your whole Experian credit report for free through Money Saving Expert Credit Club and as stated above Equifax through Clearscore.

Note: Don't pay any attention to the number they give you, it's kind of meaningless. Just check over the detail of your credit history.

[genovese]

Originally Posted by something55

not buying until after brexit as i want to see what it does to the housing
market.

Currently the doom & gloom charts are showing that there's a 64% (so specific) chance of a recession in America within the next twelve months
A proper shit storm of a recession worse than 2008 allegedly
Followed by Mexico, China & the UK

So maybe some property bargains to be had
And at least it would take brexit outta the headlines eh

[newbs16]

^^ do you think the property prices will reduce after Brexit?

[OhNoTotoro]

Might not be the best time to do it with all this Brexit bollocks looming.

Couple of other questions - have you ever lived alone before, do you think you'd get along OK or would you get too lonely? And how secure is your job? If you were to lose your job and then the house, the £50,000 you put into buying the house presumably would be gone and you'd have to start saving from scratch?

Personally, I would sit tight for another couple of years, just to see how things look with Brexit. And keep on saving up as much as you can. I don't think your Mum laughing at you should be a bar to you doing your own thing in your thirties, that would be a pathetic/mean response to someone just trying to expand their life.

As for how to actually go about getting a mortgage, it can't be all that hard if the general public are doing it all the time. I bet banks/brokers get people coming to them all the time saying they want a first time mortgage but don't know the steps.

Originally Posted by newbs16

^^ do you think the property prices will reduce after Brexit?

They've already reduced.

[silence]

Awesome advice

Dusted off the credit card and I’ve tried the credit reports nothing too scary there can’t see anything jumping out that I need to change. The numbers do look good but yeah I won’t pay too much attention to that as it’s probably much more complicated.

Downloaded the First Time Buyers’ Mortgage Guide 2019 off money saving expert I’m going to have a lot of weekend reading to do.
Err yeah Brexit I’m hoping to buy next year? But don’t know if things would have settled by then. But houses really do need to come down (without everything else crashing) it seems ridicules for how little you sometimes get.
I think my job is safe there is always talk about the jobs moving but I’ve been there since 2013 so that must count for something.

I remember there was an article on the BBC website about people buying their first house at a younger age and they all had partners made me mad. I feel I’ve more chance getting a mortgage than a date
I was pretty alone at university I lived in a bedsit second year. I hardly spoke to anyone in the 3 years I was there. I definitely need time alone to recharge. Sometimes I get scared if I’m alone in the house at night and I need help removing spiders but I do have family I could go and visit and a spider catcher!
Yeah I’m sure other people don’t overthink things this much. I need to overcome my fear and just go for it. I will try setting up the help to buy in the next couple of weeks...maybe

[newbs16]

^^ They don't seem to have reduced where I live.

[choirgirl]

Best thing for OP to do in that case would probably be to move back in with mum, if mum was okay with it, while renting the place out. Although if your tenant didn't pay, you'd be ****ed, so yeah, maybe not. There used to be some kind of mortgage interest benefit thingy, and I think it still exists as a loan, but you have to unemployed for bloody ages to get it and obviously you'd probably be losing your mind along with your house after nine months of signing on.

[Reformation]

You're in a good financial position with that income and those savings if you're savvy. Although the fact that you don't seem to know you're in a very good position pushes me to advise to be a little extra careful and thoughtful in what you decide to do.

You could put 40k down on a £125k property and walk away with a mortgage with a very good rate due to the loan to value ratio starting off relatively low.

You'll have £10k in the bank for peace of mind and assuming you're quite frugal with food and luxuries, and savvy with utilities, you can thrive on your own.

However, as you're 34 you've been at home a long time. I understand the sense of urgency but try not to rush into a hasty decision now. Don't be afraid to move out into a cheap rental flat/shared place and gain experience out on your own and managing finances and a household. Perhaps take the opportunity to move to an area a little further afield if that's something you've ever been interested in. Renting gives you the flexibility and little commitment. It only has to be for 6-12 months. You'll learn a lot and you'll be more likely to make better decisions about buying.

[silence]

^ yes I***8217;ve been long term unemployed before and it was not good! Even now I keep thinking about what kind of position I would be in now if only I'd got myself sorted a few years earlier...

I never really thought of paying more into the deposit to make things easier. I have got used to having money there when I need it. Before I go anywhere I will try and do an estimate of how much I would be paying for utilities (I***8217;m not sure I can imagine having slow internet). I do a have couple of thousand elsewhere for emergencies set aside.

So I***8217;ve done it I had the awkward conversation and it went really well! I mentioned it the other day and the reaction was good and she thought it was a sensible to open the help to buy isa.
So earlier we went through the application as there was a part I was confused on when I tried it myself. As I was doing it I had to open my current account and she saw how much money I had I think she was very surprised and suggested I should do something with the money so I said that***8217;s what I was doing.
Now I***8217;m paying into it every months I***8217;m going to relax a bit and start thinking of the next move start of next year and just keep up the saving and building credit while I go.

Thanks to all here for the confidence and extra push I needed