Last week I asked my Instagram pals if they had any questions relating to my experience of applying for a mortgage and buying my own place. Minutes later, the questions began coming in thick and fast and I spent the evening sharing a number of tales and tips.
I got good feedback, with a number of people messaging to say how helpful the Instastory had been, so I figured I’d share the information on my blog for anyone who might have missed it.
If you’d like to view my answers on Instagram itself, head over to my profile and click the Home AMA highlight underneath my bio.
How much money did you save for your deposit?
The exact amount is a secret, but I managed to put down more than 20% of the property’s value so that I could get a better interest rate.
The more you save for your deposit, the easier you’ll find it to get your mortgage application approved and the cheaper your monthly repayments will be.
Saving 20% isn’t possible for everyone so just do your best.
If you live somewhere where prices are rising fast, it may be worth buying ASAP with a smaller deposit so you don’t keep getting priced out.
To learn more about buying your first home, take a look at Can’t Swing a Cat’s first time buyer blog section.
How did you even manage to save?
I lived with my parents for most of the time I was saving a deposit so that obviously made it a lot easier because I only had to pay them £200 a month for rent and bills. After a while I moved into a rented flat with my then-boyfriend and saving money obviously got a lot harder. I spent a lot of my spare time doing freelance work so that I could continue to save and it was incredibly boring. The whole time I was saving, I made ‘saving money’ my number one priority. I became really obsessed with it and thought about it all the time. I lost interest in going on mad nights out, buying new clothes, and going out for meals because all I could think about was how much I wanted to have my own place.
Do you wish you’d bought a place with someone else or was it worth it?
Well I’m alone AF so that wasn’t really a choice. When my ex and I split up in 2016 I was gutted because I’d spent my whole deposit-saving mission assuming that when I bought my own place, he’d at least move in with me even if he couldn’t afford to buy it with me. But obviously I’m now glad that the place is all mine because living alone is mint.
Buying a place with someone else would have made the deposit-saving so much easier though. Depending on how much the other person was earning, it could potentially have halved the amount of effort I’d have to put in/sped up the process.
Living with my parents was a privilege, but being able to buy with someone else is a privilege too. When you’re single as fuck and have no one to buy with, you’ve got your work cut out for you.
How easy was it to get a mortgage?
This is a tricky question to answer because there were highs and lows. Because I had a decent deposit and my credit history was clean and tidy (if not a little non existent because I’d never really borrowed money before), this made it a lot easier than it could have been.
I would 100% recommend using a mortgage broker rather than going straight to a bank.
They’ll help you overcome any obstacles such as a poor credit rating, low or freelance income, or a small deposit, and they’ll compare tons of deals to find you:
A. The lenders most likely to approve your application
B. The most affordable deals for you
If you’d like to use Habito as your mortgage broker, sign up with my refer a friend link and you and I will each earn a £50 John Lewis voucher on successful completion of your mortgage. Habito are free to use and won’t charge you a fee. They make money from lenders instead. So if you’d like to use them, create an account using this link.
What made you buy a new build and are you glad you did?
At first, I was adamant that I didn’t want to buy a home that I couldn’t properly see, but I’d just moved in with my parents again after the break up, was absolutely hating life, and my parents were talking about how much of a great deal this apartment would be because it was cheaper to buy it when it wasn’t built than it would be to buy ready built.
In theory, it should’ve required no decorating or maintenance compared to older apartments in the area. Also, because it would take several more months to build, it gave me more time to grow my deposit. I was really unsure about buying it at first, but I have no regrets.
There are some snags and things wrong with it, but it mostly doesn’t have an impact on my life and I’m really happy here.
If you’re thinking of buying a new build, here’s my number one tip… read up about leasehold properties. Take some of the horror stories you read with a pinch of salt, but it’s crucial that you understand what leasehold means and you understand the terms of your lease.
How did you manage to decorate so quickly after moving in?
I already had some furniture and most kitchen essentials from when I rented. Some of these things were gifted to me, others I’d bought myself. Most of the new furniture in my flat is from Ikea which is fairly affordable compared to other places. And as I mentioned earlier, the year-long wait in between putting an offer on the flat and actually moving in gave me time to save. Another win was the government scrapping stamp duty for most first time buyers last year. This happened just in the nick of time before I finalised my purchase, meaning I suddenly had a few hundred quid to spare to put towards furniture.
How long did it take you to save your deposit?
I started saving in September 2014, put an offer on the flat in January 2017 and finally got my keys in December 2017. However, it’s crazy how fast time flies by… even if you’re not having fun cos you’re trying to save money. So, if you really want to become a homeowner, don’t let the thought of having to save for a few years put you off. If it’s what you want, it’s worth it. Saying that, try not to put your life on hold while you save.
Do you have any regrets?
I kinda regret sacrificing so much in order to save the deposit. I should’ve spent more time with my friends, less time working, been on holiday more etc etc. But if I had have done things slightly differently, maybe I wouldn’t be here now.
What would you say is the best current account to have alongside a Help to Buy ISA?
This completely depends from person to person.
Nationwide’s FlexDirect current account is a really good one. At the time of writing this, it gives you 5% interest on up to £2,500 for the first year you have the account. After that year it drops to 1% so it’s probably worth closing it and getting a different one. There are terms and conditions such as:
- To get the interest you need to pay in £1,000 a month
- You can’t get the interest if you’ve ever had a FlexDirect account before
Some of my other favourite accounts include:
- Tesco Bank current account – 3% on up to £3,000
- TSB Classic Plus – 5% on up to £1,500
- Bank of Scotland Vantage – 1.5% on up to £5,000
- Club Lloyds – 1.5% on up to £5,000
Online banks such as Starling and Monzo are great for tracking your spending with an app. They’re not great for interest though, so I wouldn’t recommend putting deposit savings in here.
Maybe you could open one of these and have it as your ‘spending’ account, move £200 a month into your Help to Buy ISA, and then if you have more savings left over, move that into one of the current accounts I mentioned earlier.