FTB - What am I missing...

pilesofstones

Hi everyone,

Just wondered if someone can give me some advice. I'm 21 and I graduate this year. My plan has always been to go into teaching (although my career is being polluted by many who don't have a real passion and just see it as a quick career). So I'll hopefully be on wage of £21k starting. I have no student debt and (as of this month) no credit card debt etc. So basically I owe nothing.

I have no savings currently, but can probably afford to save £300-£400 a month up until September. After that I'll receive around £8000 in tax free bursaries through my teacher training. I'm able to stay at home through my year of teacher training. So basically all of that can be saved.

In a worse case scenario I'd have possibly £11,000 for a deposit. Would this be enough to look at getting a mortgage on my own?

It just seems almost impossible to buy a house!

Thanks for any advice,
John

LandyAndy

Lets say you can borrow 3 times your salary as a mortgage, that'll be £63k.

Add on what you have saved. Is that enough to buy a property where you live?

PS. Dont even bother with this calculation if your contribution is less than 10% of the property price.

pilesofstones

Can you buy a property anywhere for that much?

IveSeenTheLight

pilesofstones wrote: »

Can you buy a property anywhere for that much?

HSBC would lend you 3.5 times your salary (73.5k)
https://hsss2.hsbc.co.uk/bankinguk/mortgageAIP/ourservice.jsp?Start=true
With the £11k deposit you could have, you would have the ability to buy a place for circa £85k (but there are purchasing costs)

Assuming you could also cover these costs from saving once started working, there are many properties available for this price, although unfortunately we do not know your area.

While studying for teacher training, could you not earn / save during that year. I didn't think the years teacher training was full time

PasturesNew

pilesofstones wrote: »

Can you buy a property anywhere for that much?

Yes, in a lot of areas. You need to get out more.

brit1234

pilesofstones wrote: »

Can you buy a property anywhere for that much?

Thats why prices are set to continue falling, thet are simply overvalued compaired to the lending criteria. It is widely thought that it is highly irresponsible to return to the risky lending practises that created such high overvalued properties.

Prices are simply going to fall and your best stratergy is to save the best deposit you can.

property.advert

Not much good if he lives in London is it, 21k a year won't buy anything, yet remarkably, there are still schools in London.

An argument you can use, which has some validity, if you have a decent percentage deposit, is the cost of rent versus the cost of a mortgage. Thus if you were on a 3% mortgage and a 3.5 multiple, your £183.75 interest only mortgage payment might be better than the rental alternative.

Can you get someone to rent a room if you get a 2 bed or more place ? If so, what will they pay ?

Could you get a guarantor ?

asajoseph

I was under the impression that guarantor mortgages were quite hard to come by these days. I was lucky enough to get one when I first started out, through Northern Rock in fact (and look what happened to them!), but I thought that they'd more or less dried up now.

In answer to the question, in London you're not going to find anything in that budget, though if you can put yourself in a position to save £3-400 towards a mortgage every month, I'd try to stay in that position for as long as possible. Outside of London though, you'll find it easier. It probably won't be swanky, but there are more than decent one-bed flats available for less than £100k.

Think about trying to save for a few years, it would probably work out a lot better in the long run.

The other thing I'd say is, watch your credit record. My problem when I first started out was that apart from being on the electoral roll and having a contract mobile, I had no credit history whatsoever, which is why I had to get a guarantor mortgage. All worked out for me in the long run, but things aren't so easy now.

pilesofstones

Possibly a stupid question, but. Is there a good percentage of deposit to aim for? Is the deposit put into consideration by the mortgage provider (i.e. to show you can collect capital)?

chambta

Though there's no formal calculator with RBS group mortgages it works out for approximately 4.5 times salary. That assumes no dependents and no other debt repayments. That though would be at 75% LTV. At 90% it would be reduced slightly.