FIRST-TIME buyers Samantha and Todor bagged themselves £10,000 in free cash to put towards the deposit on their first home.
Engineer Todor Marinov, 32, and 3D visualiser Samantha Houghton, 28, bought their £432,995 first home in Warwickshire in December last year.
Todor and Samantha who have recently moved into their new home
The couple moved into their first home in December
The couple got £10,000 towards their deposit from the homebuilder
The couple managed to get together enough cash to put down a 10% deposit of £63,000.
But using a scheme from homebuilder Barratt Homes, they were able to boost this by an additional £10,000.
The scheme, known as Deposit Boost, is offered by the developer to all homebuyers purchasing a newbuild, with the exception of buy-to-lets.
The extra money was a welcome boost after they missed out on a £2,000 saving bonus from Help to Buy.
If you have a 10% deposit saved, Barratt boosts that by an additional 5% of the purchase price, giving buyers a 15% deposit in total.
Samantha and Todor don’t need to pay the £10,000 back, they just had to agree complete the sale on, or before, an agreed date.
Developers will often offer incentives to buyers looking to bag a new-build property to get a deal over the line.
These freebies depend on the home builder but can include offering cash to put towards stamp duty and legal fees, and sometimes appliances like fridges, washing machines and dishwashers are installed as perks to make buyers more likely to buy.
In some cases – like Samantha’s and Todor’s – you can get free cash from the builder to put towards buying your home, meaning you don’t have to borrow as much through a mortgage.
For the couple, it means they borrowed £359,995 instead of £369,995.
Although the pair received an impressive incentive, you’re not guaranteed to get a big wad of cash.
What you get depends on a case by case basis, and varies depending on who the developer is and what they’re willing to give to you.
If you’re a budding new-build buyer, it’s best to check in with the developer about what incentives they’re offering on the house you want.
We sat down with Samantha and Todor to see how they managed to become homeowners for HOAR’s My First Home series.
Tell me about your home
It’s a four-bedroom house detached house in Warwickshire.
We have a front garden with a double-driveway.
Downstairs is the living room with a large kitchen diner, separate kitchen and utility room. There’s also a downstairs toilet.
Upstairs, we have the master bedroom with an en-suite, two guest bedrooms, an office and a family bathroom.
How did you decide on the location?
When choosing the area, there was a number of factors that made the move beneficial for both of us
Our workplaces are nearby and my parents live not too far away too.
Commuting to major areas such as Leamington, Coventry and Birmingham is also simple with easy access to the M40.
How much was it?
The house was £432,995 and we put down a 15% deposit of around £73,000.
Our saving habits had put us in a good position to be able to put down a big deposit.
But we also used a deposit boost scheme which was available through the homebuilders Barratt.
We put together a 10% deposit of £63,000 but this was topped up by a further 5% of the purchase price.
This meant that Barratt contributed an extra £10,000 to our deposit, taking it to £73,000.
This meant that we could borrow less from our lender.
We took out a mortgage of a £359,995 for 30-years with a fixed rate of 3.79%.
Going for a longer mortgage means that our repayments are a bit more manageable.
We pay around £1,200 a month towards our mortgage.
How did you save for it?
We started to save really hard from 2019 when we both opened a Help to Buy Isa.
Then Covid hit in 2020, and we have the opportunity to save even more cash because of the restrictions on going out.
Over this time, we stopped going to gigs and comedy events, as well as weekend city breaks.
Before, we would spend around £400 a month on these activities, so we saved around £10,000 in total over two years.
Me and Todor also used to love meals out and nights in with a takeaway.
We discovered we were spending around £100 on a nice meal out and around £50 on a takeaway each week.
We decided to cut this out, by swapping meals out for dinners at home.
If we were going to a gig, for example, we would make sure we ate before going rather than spending money on a meal.
All of this meant that we could save around £2,500 a month between the two of us.
We also got around £2,000 as a cash gift from my parents, which we were very grateful for.
Were there any complications?
We missed out on getting the bonus from our Help to Buy Isas because we bought a property over the £250,000 threshold.
By the time we came to buy, we had around £10,000 saved in these accounts between us.
This meant, we could have got a total of £2,000 in bonus cash from the government, but didn’t because we were no longer eligible.
In hindsight, switching to a Lifetime Isa, which has a higher limit of £450,000, would have meant we still got the 25% bonus.
How did you afford to furnish it?
We saved a little more than we needed to for the deposit to account for buying furniture for the house and carried on our good saving habits.
We have also been buying everything in stages to spread out the cost as we don’t have a specific budget in mind.
When shopping online, we used a Google extension called Honey, which scans the web for codes that will get you money off your order.
This definitely helped us to save a few hundred pounds extra.
What advice would you give to other first-time buyers?
Just don’t be afraid to ask questions because it can be a difficult and complicated process.
I found that mortgage brokers and representations at the home builders were more than happy to help and answer questions.
I never felt pressured and I think that’s really important too.
One family used the snowball method to clear £26,000 worth of debt and buy their first home.
One savvy saver managed to put half of his wages away while still renting to buy his first home.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
Did you miss our previous article…
https://hellofaread.com/money/im-a-second-hand-expert-how-i-spot-the-real-value-of-charity-shop-buys-to-make-up-to-5000-a-month/
