Mortgages for low income first time buyers.

Riblet

Hi,

First time poster here. I did do a search before posting this, but didn't see anything, seems the word "Low" is too small to search, and nearly everyone has the word income in their post :rolleyes:

So anyway. I'm 21, currently living with my mother. However, I've devised a 2 year plan where I *should* be able to save up around £10k, as a deposit. I'm already 8% of the way there. I've been told by a few people that lenders generally respect you a lot more, and are more willing to 'bend' when you can get a deposit together, as it prooves you are capable of saving, and are a safer bet. So, in two years, I should have my deposit. Does a deposit significantly improve my chances?

The only thing conerning me is my income. By 'basic' income is exactly £10533.90. However, I get paid bonus in my job (per month) which can be as high as 35% (but usually around 10-15%, it's rarley 0%), I also do a lot of overtime, so the actual figure can be as high as 12k-13k. I would obviously need a P60 to prove this to a lender.

However, running searches in MoneySupermarket and co always returns nothing. Playing with the values, it's not the deposit which makes a difference, but the income I declare.

When I look at the monthly repayments, they tend to hover around £400/month on the varible or discount mortgages. I know I can afford this, as I'm paying more than that into my savings account already, plus I have other outgoings which total around £250 right now. I'm looking for something around the 85k mark in price. Where I live, this is feasable.

My credit rating should be good, never missed a payment on anything, and my credit cards are nill the majority of the time. I'm very smart when it comes to money, I'm aware the majority of people my age are in debt, and I try hard to avoid that.

Am I'm simply priced out of the market to own a flat/house?

homer_j_3

A deposit does help in the lenders eyes as it gives them security. However, you can get 100% mortgages but I dont think that these are what you are looking for.

I would look for a lender that asesses you on affordability rather than income stretch. Basically this means that the lender says that providing you can afford the monthly payment after all your outgoings then they will lend. So they take your net monthly income and say that they will allow 40-50% of this to be your mortgage payment providing your other outgoings dont eat into this, rather than say 4 x your gross salary.

This works better for people with liitle outgoings so may be an option. Really all I would say is gather as big as a deposit you can and then go and seek advice when you are happy with your deposit.