when should we get a mortgage?

magali

My boyfriend and I are living with his mum the time to save some money to get a mortgage.
We earn £15600 and £17300 so we got together £32900.
We got £6000 saved in an ISA at the moment but we will try to double it by the end of this year.
How much could we borrow?
How much would be the fees for a property at the morgage proposed?
When do you think we will be ready to get on the property ladder?
Thank for your replies.

Ian_W

1. Lenders have different limits and ways of calculating affordability. Assuming you have no debts/credit probs probably £100-130K. Go on some Bank/BS sites, most have calcs under mortgages showing how much you can borrow when you enter income etc.
2. I would say at least £2K [mortgage arr fee, survey, legals] and 1% SDLT if prop is over £120K and not in an exempt area.
3. All depends on house prices where you are. Where I live, not the cheapest but not London/SE prices, you can get a 2 bed terraced in an OK area for a £100-120K, a flat for a little less, so you wouldn't be too far away really just a bit more saving needed. If you live somewhere more expensive then you might need to look at smaller props in less desireable areas to be anywhere near.

In the meantime read all the stuff in the mortgage section of the site to get yourself up to speed on them. Also consider using a mortgage broker for your first one. Whole of market working on lenders commission not fees are best.

HTH & BoL.

Chobra

Another thing you may want to look at is the loan to value percentage,normally you can incur higher lending charges on certain deals that are above certain percentages borrowed with most being 90-95%.

The more deposit you accumulate the better as it will help lower your monthly costs and interest rate.

magali

Let's say we borrow £130 000 and give a 10% deposit (£13000).
with around £2K in fees...and the use of a broker, our total saving would have to be £15000, is it right?
Could you tell me as well what mortgage percentage we should look at.
Many thanks

nmiah786

Your deposit will be a percentage of the purchase price not a percentage of the amount borrowed;

Purchase price is £130k, 10% deposit = £13k, mortgage = 130 - 13 = £117K.

Also dont for 1% Stamp duty on £130k = £1300k :eek: ....oppps I mean £1300.