How much can I borrow?

XDA

I wonder if there are any mortgage advisors/brokers on here that can give me some advice?

I earn £16,800 p.a., and I have a £7000 deposit. I am right in thinking that your income is multiplied by 3.5 which gives the maximum you can borrow? If so, then I can borrow about £59k.

Is this right? Is there anyone that can give me a rough estimate on what you think I can borrow based on my salary and deposit.

luckyfool

If you can cover legal fees and other costs on top of the deposit, then I would look at paying up to £70k for a property. That means your £7k deposit is 10%, so you will be able to access better deals. Also £63k on a mortgage should be achievable from a wide range of lenders.

If you go any higher you are looking at a massively reduced field of lenders to choose from due to the higher loan to value and income multiplier. You will also be looking at a hefty rate hike along with probably higher fees.

andrewmp

XDA wrote: »

I wonder if there are any mortgage advisors/brokers on here that can give me some advice?

I earn £16,800 p.a., and I have a £7000 deposit. I am right in thinking that your income is multiplied by 3.5 which gives the maximum you can borrow? If so, then I can borrow about £59k.

Is this right? Is there anyone that can give me a rough estimate on what you think I can borrow based on my salary and deposit.

I am in a similar position to you, I have a £15k deposit though. Am buying a property for £75,000. I'd say £60-65k is the max you should actually borrow on your salary giving you a budget of around £70,000 max.

Which area do you live in?

XDA

luckyfool wrote: »

If you can cover legal fees and other costs on top of the deposit, then I would look at paying up to £70k for a property. That means your £7k deposit is 10%, so you will be able to access better deals. Also £63k on a mortgage should be achievable from a wide range of lenders.

If you go any higher you are looking at a massively reduced field of lenders to choose from due to the higher loan to value and income multiplier. You will also be looking at a hefty rate hike along with probably higher fees.

£70k is probably about the price of a decent house in this area!

How much more would I need to legal fee's and other costs? Would this include building/contents insurance?

andrewmp wrote: »

I am in a similar position to you, I have a £15k deposit though. Am buying a property for £75,000. I'd say £60-65k is the max you should actually borrow on your salary giving you a budget of around £70,000 max.

Which area do you live in?

Yeah, I wasnt looking to borrow too much.

I live in Southern Scotland mate.

andrewmp

XDA wrote: »

£70k is probably about the price of a decent house in this area!

How much more would I need to legal fee's and other costs? Would this include building/contents insurance?



Yeah, I wasnt looking to borrow too much.

I live in Southern Scotland mate.

I'm in the North East of England so probably similar prices.

luckyfool

XDA wrote: »

£70k is probably about the price of a decent house in this area!

How much more would I need to legal fee's and other costs? Would this include building/contents insurance?

Legal fees (inc. disbursements) - £900-£1,000 if you shop around
Valuation Fee - around £200

Building and Contents is separate, unless you are buying a flat in which case the buildings cover might be included within your monthly service charge.

andrewmp

luckyfool wrote: »

Legal fees (inc. disbursements) - £900-£1,000 if you shop around
Valuation Fee - around £200

Building and Contents is separate, unless you are buying a flat in which case the buildings cover might be included within your monthly service charge.

Sounds a bit over the top to me. If the house has a HIP you'll be looking at less than £500.

luckyfool

andrewmp wrote: »

Sounds a bit over the top to me. If the house has a HIP you'll be looking at less than £500.

Its in Scotland, hence no HIP.

andrewmp

luckyfool wrote: »

Its in Scotland, hence no HIP.

Closer to £700 then?