Mortgage is it better to pay more in deposit?
I know nothing about mortgage my husband and I are going to try and look for a place in a year or so. He wants to put our max savings into the deposit but I don’t want to because I need my money for my own security if I put it on a house then I won’t have anything to protect myself. He things I’m going to put a lot of money but I don’t want to. I’m pretty sure we can get a house and pay mortgage monthly if we’re both working
I'd probably keep a buffer of 2 months' worth of mortgage repayments in a savings account, in case of emergency, but then put the rest on a deposit.
The bigger the deposit, the shorter the term needs to be.
The shorter the term, the less interest overall, and you'll have paid it off sooner.
So on the whole I agree with your husband, but you're also right to keep a bit of emergency money in savings.
Also, if it's the first house for both of you, I'd be looking into investing in lifetime ISAs (one for each of you) first. Max them both out with £4k in each, and even if you're only using them for a year you'll be getting £2k from the government free if you are combining your money.
£8k saved (4k per isa) gives you £10k back.
The bigger the deposit, the shorter the term needs to be.
The shorter the term, the less interest overall, and you'll have paid it off sooner.
So on the whole I agree with your husband, but you're also right to keep a bit of emergency money in savings.
Also, if it's the first house for both of you, I'd be looking into investing in lifetime ISAs (one for each of you) first. Max them both out with £4k in each, and even if you're only using them for a year you'll be getting £2k from the government free if you are combining your money.
£8k saved (4k per isa) gives you £10k back.
Reply 2
Yeah the answer is going to be somewhere in the middle. Having more up front definitely helps a lot, unlocks better deals and means borrowing less, and I don't know how available/practical 100% mortgages are these days. But likewise it's not wise to utterly clean yourself out to do it, keeping reserves becomes no less important.
Reply 3
Original post
by PinkMobilePhoneI'd probably keep a buffer of 2 months' worth of mortgage repayments in a savings account, in case of emergency, but then put the rest on a deposit.
The bigger the deposit, the shorter the term needs to be.
The shorter the term, the less interest overall, and you'll have paid it off sooner.
So on the whole I agree with your husband, but you're also right to keep a bit of emergency money in savings.
Also, if it's the first house for both of you, I'd be looking into investing in lifetime ISAs (one for each of you) first. Max them both out with £4k in each, and even if you're only using them for a year you'll be getting £2k from the government free if you are combining your money.
£8k saved (4k per isa) gives you £10k back.
The bigger the deposit, the shorter the term needs to be.
The shorter the term, the less interest overall, and you'll have paid it off sooner.
So on the whole I agree with your husband, but you're also right to keep a bit of emergency money in savings.
Also, if it's the first house for both of you, I'd be looking into investing in lifetime ISAs (one for each of you) first. Max them both out with £4k in each, and even if you're only using them for a year you'll be getting £2k from the government free if you are combining your money.
£8k saved (4k per isa) gives you £10k back.
Yeah I understand this but I’m just thinking about myself too it’s hard
Reply 4
Original post
by StriderHortYeah the answer is going to be somewhere in the middle. Having more up front definitely helps a lot, unlocks better deals and means borrowing less, and I don't know how available/practical 100% mortgages are these days. But likewise it's not wise to utterly clean yourself out to do it, keeping reserves becomes no less important.
Is it better to buy two properties in each of our names and put one on rent?
Original post
by AnonymousYeah I understand this but I’m just thinking about myself too it’s hard
What do you mean you're thinking about yourself?
Which circles back to your first post actually, when you say you want to keep some money for your own security to protect yourself, what are you talking about exactly?
I had assumed you were meaning in case you and your husband had some sort of financial emergency (losing a job, for example), but now, especially with the comment you've made to StriderHort about wanting to buy two properties, I'm beginning to wonder if you mean you need some savings in case you get a divorce... am I right? If so, why would you get married to someone if you are afraid to buy a property with them? There's more than few red flags going on if you've got this in the back of your mind - it's not usually a scary prospect buying a home with your husband.
Reply 6
20
Original post
by AnonymousI know nothing about mortgage my husband and I are going to try and look for a place in a year or so. He wants to put our max savings into the deposit but I don’t want to because I need my money for my own security if I put it on a house then I won’t have anything to protect myself. He things I’m going to put a lot of money but I don’t want to. I’m pretty sure we can get a house and pay mortgage monthly if we’re both working
You absolutely can't put all your savings into this. You do need to keep emergency funds available to cover unforeseen expenditure.
When I bought my house with my partner, we ended up having to replace the boiler in the first year after we moved in -- and that cost around £2000 if I remember correctly. And there are other potential significant emergencies you need to have money set aside to cover -- things like your car breaking down for example.
Reply 7
Original post
by AnonymousIs it better to buy two properties in each of our names and put one on rent?
That is... an INSANE question to ask a stranger, especially since I know 0 about you or your situation & finances 😅
What I can tell is you're basically not getting a mortgage with no deposit, and you sure as hell aren't getting 2 mortgages with no deposit . I don't know how buy-to-let works these days, but its nowhere near as profitable as it used to be and I think the lender takes a far greater interest/% now. People also forget that being a landlord is work, not passive income and you will suffer losses.
Original post
by AnonymousI know nothing about mortgage my husband and I are going to try and look for a place in a year or so. He wants to put our max savings into the deposit but I don’t want to because I need my money for my own security if I put it on a house then I won’t have anything to protect myself. He things I’m going to put a lot of money but I don’t want to. I’m pretty sure we can get a house and pay mortgage monthly if we’re both working
Obviously keep some savings back.
But the more money you put down as a deposit, then the less you will have to borrow. And the cheaper the monthly mortgage payments will be. You may even be able to shorten the mortgage term if you put more deposit down.
Reply 9
21
Original post
by AnonymousI know nothing about mortgage my husband and I are going to try and look for a place in a year or so. He wants to put our max savings into the deposit but I don’t want to because I need my money for my own security if I put it on a house then I won’t have anything to protect myself. He things I’m going to put a lot of money but I don’t want to. I’m pretty sure we can get a house and pay mortgage monthly if we’re both working
Women that protect themselves with an escape fund are pretty much guaranteeing that the relationship will fail. Indeed, I'd break up with a woman who wanted to keep an escape fund.
When it comes to buying a property and marriage, you need to trust your other half or don't bother.
Bear in mind that when you purchase the house you can legally define the ownership split between you so if you break up, your boyfriend would have to pay you be that via a loan or selling the house.
(edited 9 months ago)
Reply 10
Original post
by AnonymousIs it better to buy two properties in each of our names and put one on rent?
I'd have to agree that this is a wild question. Have you looked into how much you might need to put down as a deposit on each property, or what salary you'd need to earn individually to make this feasible?
Going back to the original question, the general advice is to have around 3 months salary set aside in savings at anyone one point. As others have said that way you'll won't be overly reliant on credit for unexpected bills like boiler, car or roof repairs. You might feel comfortable with more, but that's your starting point.
Reply 11
Original post
by PinkMobilePhoneI'd probably keep a buffer of 2 months' worth of mortgage repayments in a savings account, in case of emergency, but then put the rest on a deposit.
The bigger the deposit, the shorter the term needs to be.
The shorter the term, the less interest overall, and you'll have paid it off sooner.
So on the whole I agree with your husband, but you're also right to keep a bit of emergency money in savings.
Also, if it's the first house for both of you, I'd be looking into investing in lifetime ISAs (one for each of you) first. Max them both out with £4k in each, and even if you're only using them for a year you'll be getting £2k from the government free if you are combining your money.
£8k saved (4k per isa) gives you £10k back.
The bigger the deposit, the shorter the term needs to be.
The shorter the term, the less interest overall, and you'll have paid it off sooner.
So on the whole I agree with your husband, but you're also right to keep a bit of emergency money in savings.
Also, if it's the first house for both of you, I'd be looking into investing in lifetime ISAs (one for each of you) first. Max them both out with £4k in each, and even if you're only using them for a year you'll be getting £2k from the government free if you are combining your money.
£8k saved (4k per isa) gives you £10k back.
Good advice. Can't give you another rep apprantly.
Reply 12
You also need money to furnish your home, insurance, bills council tax and obviously emergencies for any building issues eg new boiler.
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