First Time Buyer's Guide To Mortgages

verandi

Does anybody know of a good and thorough website that explains how to do the calculations associated with a mortgage? For example, when I go on moneysupermarket etc and do the mortgage calculator, it tells me what my monthly payments would be based on loan value, interest, loan term etc. I'd like to make a spreadsheet so that I can use it and add to it. Also, I'd like to know how to calculate whether I'd be better off renting or getting a mortgage by trying different values of monthly rent and different mortgage rates. Does anyone have a spreadsheet or similar which does this? Thanks!

danielmarriott

Just the info i was looking for, thank you.

northlondonhomebuyer

I have been employed for the last 5 years at the same organisation and have a mortgage commitment in principle from the bank but am yet to find a property. I am about to be made redundant and am likely to have at least a months gap in employment. What I'm not sure about is how this is likely to affect my chances of being eligible for a mortgage if I find my dream house now! What is it that the banks require as assurance when agreeing to lend? Should I pause my house search until I am on a contract again and what if I am on a short term contract for the next few months?

cleas001

Hi I am a 25 year old and have approx 12k of savings in the bank - I'm earning £31k a year plus a small bonus (approx £2k per year) both before tax.
I've been living with my parents this past year, having rented provately for a couple of years prior to this. I have no debts and very little outgoings at the moment and would consider my employment status to be pretty secure.
I don't really have anyother assets aside from my cash in the bank (mentioned above) I also have a car which I purchased outright now worth about £20k.
I really would like to move out as quickly as possible - having ery little experience of mortgages should I take the punge now with a realtively small deposit OR wait 12-18 months longer (in which time I could realistically save £900 per month to put towards a deposit).
I really would like to move out asap...what advise would you offer?

dawyldthing

it depends how much you want to buy the house for? If buying one for 60k then 12k - 2k for buying expenses would be 10k, so about 16% which isn't bad, and you'd be able to do it on a 31k wage i'd imagine. But if you want a 100k mortgage you could get into the higher interest bracket so could be costing you a whole lot more. If possible try and get to 40% as you will get much much better rates as the bank knows regardless they will get their money back so your less of a risk so will give you better rates as a reward

R-McK

Complete novice (forum and mortgages!) looking for some information regarding how mortgages are calculated.

I'll get the potentially stupid/ridiculous question out the way first. Do different rules apply to mortgages in Scotland compared to other parts of the UK or is it generally the same process across the board?

My main issue was with income and how they calculate mortgage amounts. I earn £28k basic wage, but every month I earn double (give or take) due to overtime, offshore work etc. This has been consistent over the past 18+ months, and can be backed up with wage slips (I've read previous posts that have stated at least the previous 3 months wage slips are usually required). I can only assume however that as it is not my contracted basic wage I can't put these extra earnings forward as my annual salary when making enquiries regarding a mortgage??

Any advice and assistance on this would be greatly appreciated.

kingstreet

Although the property purchase system is different to that of England & Wales, the mortgage application process is broadly similar. In Scotland you may not need to commission your own separate survey as a Home Report will already have been carried out.

Lenders normally take your basic income at 100% and any regular variable earnings into account, at perhaps 50% or 60%, in calculating your borrowing power. They deduct the monthly cost of credit commitments and make a deduction for dependents.

The "norm" these days is a maximum of around 4x income, although there are a handful of lenders who will lend more...

Example;-

£28k basic
£14k variable additional income
£4k loan at £200 per month
Lender permits 4x income and 50% of variable earnings.

£28k + £7k = £35k - £2.4k pa credit = £32.6k x 4 = £130k maximum mortgage. Add deposit to calculate maximum purchase price.

JemimasLocket

Hello : ), I am a complete mortgage novice so really could do with some advice. My partner and I have fallen in love with a property, we are first time buyers so recent 5% deposit schemes have made it possible to think about getting on the property ladder when we never thought we would be able to. The big issue is I started my own business about 6 months ago, my income is steady and increasing but I can't prove this on paper yet. Is there anything atall that I can do? I know that lenders require about 3 years worth of proof for this, but its hard to accept when we have the cash for a deposit and a house within our budget. Is there any hope for us? Any advice would be greatly appreciated.

TanvirBD

hi all member
very good post and comments..........

maimee_magic

Are leasehold flats unmortgagable if there's no management in place?