First time buyer young professional

Mistress_of_the_Ships

Hi, my partner and I are both qualified accountants. We want to buy a house and are not sure where to start - where should we go to get a mortgage quote? Can we get a better mortgage by being qualified accountants - what would be the typical mortgage multiple or is it done by the monthly amount we can afford? Help!

RichyRich

Try looking at https://www.moneysavingexpert.com for an idea of quotes, then if you want further advice find a mortgage broker (the key question, apparantly, is "Are you whole-of-market?".

Many lenders use the 3x earning multiple for single people, and the greater of 2.5x both people or 3x one person and 1x the other for joint applications (from what I remember from when I worked at abbey), although this will vary and if you can prove you can afford it they will oft consider more.

HtH
Rich

AndrewSmith

Hi,

It really does depend on a number of factors, such as income, deposit, security of your positions at work, credit history etc.

The average single multiple is about 3.75, with the average joint multiple being 2.75 - 3.25 x income.

Post some rough details re the above, then you will be able to get some more accurate guidance.

Hope this helps

:beer:

Andy

Joe_Bloggs

The first thing to do is a credit check of your own files held by credit reference agencies. Checking your own files does not count as a credit check as if made by an external agency. Even if you think you have good credit there could be factual errors and typographical mistakes. Martin has links here.
J_B.

RichyRich

Of course I didnt mean moneysavingexpert, I meant https://www.moneysupermarket.com

AndrewSmith

I agree that moneysupermarket is good for a generic comparison, however be wary of inputting any personal details into their system such as name, number etc. When you click on the button to request a personalised quote, or a call from one of 'their' brokers what actually happens is your details are placed up for auction and sold to the highest bidding broker firm.

Moneysupermarket do not actually employ any of their own brokers, they merely generate leads for mortgage and insurance brokers who pay to register on their site. They carry out no referencing or quality checks on the brokers, only that they are registered with the FSA (as all residential mortgage brokers are). They could be selling your details to a good or poor quality broker. There is no way of knowing.

Having said that, the generic comparison they offer is very good.

Andy

MortgageMamma

Yes I agree with andy, you need to ask around your friends and family and see if anyone can refer a whole of market broker to you

Joe_Bloggs

@MortgageMama
Ergo, you disagree with my advice ?
J_B.

joepubli

Scottish Widows have done professional mortgages for a long time and will lend qualified accoutants high multiples - they also have a 110% product which isn't too bad if you need to borrow that sort of percentage. You can probably get better rates but probably not higher multiples. Be careful as some of the better rates (eg the Barclays 0.19 over base) are only upto 75% value and others can charge hefty insurance for high high loan to value ratio.

As you are accountants I am sure you can work out the numbers. Working out interest rates and monthly payments isn't that difficult!

My advice is to find the best you can yourself (pop into one of the many banks etc or do online research) and see whether a good broker can beat it with a better product. Whatever you do, don't tie yourself up with a long term product (ie penalties if you change) or expensive insurance. Avoid endowment at all costs.

Steps:
1. Decide how much you can afford to pay per month.
2. Work out the capital you can borrow using interest only - use the base rate +0.5% as a guide. Leave a little flexible room incase tyhe rate goes up.
3. See what multipke of your joint earning that it.
4. If its more than 3 you may need to look at scottish widows type where they hve special schemes for young professionals as their incmes rise rapidly.
5. Work out what percentagte of the purchase price you need to borrow - if its closer to 100 then something like Scottish Widows again. If its 90 or below most lenders will be fine.
6. Compare the rates. Consider a 2 year fixed. Flexibility is good.

joe

Joe_Bloggs

Also do you have any savings that could be used for:-
1) A deposit that demonstrates significant equity to a lender to get the best interest rates.
2) Monies to pay Stamp Duty Land Tax if above threshhold?
3) Payments for legal fees, mortgage fees, removal fees etc.
If not then save up for a while.
J_B.