A few years ago I mentioned that we had both started saving in a help to buy ISA. We wanted to buy a house local to us, and stop renting the house that we lived in as it was cold and damp. We were planing on putting up with it until we saved enough to buy, saving our house deposit quickly. But the year after I wrote about it, Spike started school and we didn’t want to put her through breakfast and after school club daily. So we moved to Lancaster, to be closer to work and have a better work-life balance.
Clearing our debts and saving more
When we moved I had a loan and was only saving around £50 in my help to buy a month. The money I was saving was building up but very slowly. Unfortunately houses in Lancaster are way more to rent than in Leyland. Therefore, the money we saved in petrol by moving was swallowed up in our rent. We carried on saving what we could for 6 months. slowly building up our balances. Then the pandemic hit….
House prices rise
The pandemic was obviously scaring as hell. We didn’t know what would happen but thankfully I was furloughed and T could still work. He started working from home and he has done ever since it all started. It was the strangest 4 months of our lives. But before we knew it I was back at work and we’d been in Lancaster a year. With the start of the new normal last August we watched as the government announced new measures to help people out after the worst of it. As the stamp duty holiday was introduced, house prices soared and whilst we had around £5K between us, we knew that it wouldn’t get us anywhere fast.
A new job and a new outlook
Going into winter the uncertainty of what lay ahead. Though the incredibly high house prices made us reaslie that getting a house was much further off than we thought. I got a new job, one that offers more flexibilty and opportunities, but not much more money. We put a time frame of at least two years on the house buying, if not longer. I worked out my finances and realised that the loan I was paying off could be cleared if I used my help to buy ISA money. Then I could put the money I was paying out to my loan back in the ISA and save as much as I had in it within a year or so. That was a year ago and I’m not far off getting all the money back into the savings account. What’s more, I’m debt free – it feels so good. However even in a years time, we still wont have a 10% deposit.
A new hope for mortgage approval with a low house deposit
Thankfully, earlier this year the government announced a new 5% deposit scheme to help first time buyers. This is a mortgage guarantee scheme which basically means that the government cover the 95% mortgage should something happen and you not be able to pay it. Its designed for people like me and T, who are paying as much in rent as we would be a mortgage. But who just cant get the deposit together because, you know, life. It looks a little more secure than other options and gives us the chance to buy within the next year. Its only avaialble until December 2022 though so we will have to make our move.
Getting closer and forecasting with quick calculations
Now that we can actually think about looking at buying a house with the 5% deposit option, we’ve started looking at how much we need to save. Tools like Mortgage Calculator UK help massively because we can quickly calculate monthly payments on a house we like the look of. We can simply pop the asking price in, what we have currently got saved and with a quick click of a button we’ll know what kind of monthly payment we’re looking at. It helps us work out if we need to wait and save a little longer. We can just play around without any obligation. I spend so much of my nights on Rightmove, looking at houses. Then quickly looking up how much they would actually cost us a month!
We’re getting there slowly with the house buying. We’ve got a goal now wit the 5% house deposit, and a time frame that we’re hoping to stick to. Especially if we want to get a 5% guaranteed mortgage. Here’s hoping soon I’ll be writing all about my new home Wishlist!