First time question

stratdude

Hi all,

Right this might seem a bit of a blonde question but here goes.
I want to buy my first home and to make it easy i will say £100,000.
I have a 5% deposit of £5,000.

The bank says fine we will give the mortgage for £95,000 for the property does that mean:

A: The total £95,000 is made up of £5,000 deposit and £90,000 from the bank.

or

B: The bank lends me £95,000 and my £5,000 gives me a total of £100,000

Thanks in advance

_Andy_

It's answer 'B'

stratdude

Excellent thank you.

How accurate are these online pre agreement things. I mean most sites (banks, building societies) have a calculator so you can work out how much you can borrow. Are these accurate if I answer honestly or are they just to get you in their branch?

_Andy_

Depends on the lender - some are just a guide, for example. If you're looking to find out how much you can borrow, it will vary but the maxmium is around 5 times (assuming a very big deposit), 4x salary is quite achievable.
The more outgoings (debts) and dependent children you have the less the figure will be.

stratdude

Im 21 and when I apply I will have no outstanding loans
I earn £15k base with around £2k/year overtime (im still a studying part time for HNC) and my partner only earns £9K. We have no children (yet!)

Most of these calculators offer around £85-£105K with 5%-10% deposit.

Does this seem about right?

_Andy_

Yep seems about right, although other things that will affect the figure are the outgoings on your loans and term of mortgage.

stratdude

Excellent

The plan is to save, save and save some more and get a deposit ready for March time next year Hopefully I will be able to get a mortgage then My loans are coming to a close so lets hope its a new start.

Once again thank you.

_Andy_

No worries - best of luck with it all

Chris2685

The maximum mortgage we could get from Nationwide was 111k (or there abouts) on a joint income of 38k. Although some of that income (about 8k of it) is made up of part time second job, so I don't think they take the full amount of that into consideration. Plus, my girlfriend is pregnant so I think they also took that into account for affordability.

What I am basically trying to say is that with a joint income of 24k, I am not sure if you will get as much as 105k, but it depends which lender you go with really!