Advice for First Time Buyer

[aggie85]

Hello, we are buying our first home and have around 72k in the bank to do so. We are evaluating several options going back and forth and can't decide on the best strategy. Our goals are: 1) get on the property ladder now when prices are stable or declining, 2) build up equity to buy a more expensive house in 4-5years time. Our options are: a) Help to Buy, b) Second hand property with 10% deposit. We like option a because of how much money it saves us in interest (the mortgage rate comes down to around 1.68% - 1.84%) which means we can achieve higher equity. Our mortgage broker says we can remortgage and buy the gov out not to face any selling problems, or if price of the home declines it will make buying out the gov even cheaper. We don't like the stories we hear about new homes and snaggs that people need to deal with and worry about selling the property at a loss in 5 years time. Option b - we like the fact that second hand properties hold value better and maintainance problems can be anticipated to an extent. We don't like the high up front cost and high interest. The stamp duty discount for a property under 500k is great but there are not many nice houses at this price (our family is growing which we need to keep in mind). We like 550k homes but the up front cost would mean we need to part with all our savings. Affordability of mortgage payments is not an issue (I think we could purches a property that's around 680k). Any opinions on this, tips or personal experiences would be extremely helpful and much appreciated. I'll just add that we are in London and looking at areas like: Purley, Epsom, Borehamwood, Watford and Enfield.