Am I able to obtain a mortgage?

Andrew_Cooper

Good afternoon all,

I would like some general advice and guidance prior to a possible visit to the bank manager and was hoping you all could help me out.

I have thoroughly read and crasped Martin's mortgage guide and am now considering taking the plunge and looking into purchasing a property.

My income is £18,000 prior to tax, and have been in a steady job for 18months. My out goings per month total around the £120, £45 of that could be eradicated as its my gym membership and would cancel it should it make a difference. I also have a good credit rating.

My deposit for a property would be around the £10,000 mark and the properties I have my eye on are valued between £80,000 and £90,000.

I also have debt from my days as a university student.

This is just a general query really as to peoples thoughts and perhaps inside knowledge as to whether I would be in a position for a mortgage or should i continue to save for a deposit and wait for a pay rise?

Also, is my student loan taken into account when purchasing a property?

Thank you for your time,
Any feedback and comments will be greatfully received.

Again, thanks,

Andi

beecher

Say you were paying 6% over 25 years, a mortgage of £80,000 would cost you £515/month. If you work out how much other bills will be such as council tax, utilities bills, insurances, maintenance, it'll give you an idea of how affordable you think it is. I'd personally add to the deposit and wait for the prices to come down a bit. Hopefully your pay will have gone up too.

When you say you have debt from your student days, do you mean the student loan or are there credit card/loans? If so, try to get rid of those too.

Robert_Sterling_3

Wait .....
...................prices are falling
..................................................Keep saving

Andrew_Cooper

Thanks for your feedback.

My outstanding debt from uni is my student loan, damn thing!

Do you think, in your opinion, that property prices may still drop further? I was lead to believe, that when banks start lending again, (like the Northern Rock annoucement this morning) prices will start to creep up again as more people begin to be accepted for mortgages.

I know its a delicate market, but a bargain would be nice before the inevitable price increases!

Thanks again for your thoughts,

Andi

dwsjarcmcd

Andi,
Personally I think prices have some way to go before they hit the bottom. I would also agree with beecher that on a salary of £18k you may well struggle to get a mortgage of £70k, and certainly £80k. Again with the higher PP, you only have a 12.5% deposit, and a few more months savings combined with price drops will make that much more affordable.

Have you got additional savings for the fees e.g. conveyancing, survey, mortgage application etc?

PasturesNew

Northern Rock's calculator shows with £18k, you'd be considered for a £61,500 mortgage.
http://www.northernrock.co.uk/mortgages/calculator/index.asp

Prices will continue to fall. Wait and save for 2-3 years more... really, although you're impatient now, a lot will happen in your life in the next 2-3 years to change what you want.

In 2-3 years' time you might be unemployed, or earning 50% more... nobody can tell. You might want to change location even.

Why not rent somewhere instead? Rent a studio flatlet and you can still save towards your deposit.