First Time Buyer's Guide To Mortgages

Eponym

kingstreet wrote: »

You borrow the amount you need. If it's 78%, you pick from the products for upto 80% LTV.

That's what I was hoping the answer would be, thank you!

anotheruser

Out of interest, can you go to a lender and say "I want a mortgage where I have to pay £600 a month in repayments", then they look at how much they could lend you depending on how many years and how much deposit you have? Or is the first question always "how much do you want to borrow?". I ask because I don't know how much I would be able to borrow for lets say 20 years with a £30K deposit. For me, it would all depend on the repayment value.

Would this count as a mortgage application if I was enquiring at the lender?

grifferz

anotheruser wrote: »

Out of interest, can you go to a lender and say "I want a mortgage where I have to pay £600 a month in repayments", then they look at how much they could lend you depending on how many years and how much deposit you have? Or is the first question always "how much do you want to borrow?".

I wouldn't have thought that a lender is going to be interested in a conversation like that as they aren't very flexible, but a mortgage broker certainly should be able to run the numbers and find something for you on that basis (if it exists).

anotheruser wrote: »

Would this count as a mortgage application if I was enquiring at the lender?

Yes but I expect the lender would just keep trying to steer the discussion around to how much you want to borrow over what time period with what deposit before they would tell you what rate you qualify for, and this is what the repayment would be.

Let's face it they are just going to have a form in front of them and be very "Computer Says No" about it!

Genevieve_McKenzie

Thanks for such a useful thread!
This is very good information

Jamie1989

anotheruser wrote: »

Out of interest, can you go to a lender and say "I want a mortgage where I have to pay £600 a month in repayments", then they look at how much they could lend you depending on how many years and how much deposit you have? Or is the first question always "how much do you want to borrow?". I ask because I don't know how much I would be able to borrow for lets say 20 years with a £30K deposit. For me, it would all depend on the repayment value.

Based on my own experiences, I think any decent lender would be quite happy to start from this point. If you explain that you are currently able to afford £600 per month, they will look at your finances to help determine whether they think this viable and look into the options available to you.

Your best bet would be to start with an online mortgage calculator. Most building societies provide them on their own websites. All you need is details of your income, monthly outgoings and deposit.

PRQueen70

There's lots of advice about what to do when applying for a mortgage. My son started his first job today and is already thinking longer term about becoming a property owner.

He's done 3 years in uni (with the usual student loan debt now outstanding) and has a bank overdraft he will shortly be able to pay off before he starts to save up his deposit.

What else does he need to be doing in the mean time to make him a viable prospect for the mortgage companies?

rlove

Hi

I am a hopeful First Time Buyrer and have a question about the effect of an existing loan on how much I can borrow in a mortgage. I should stress I am aware the key thing is to ensure you can afford the monthly cost of a mortgage + other expenses, + £2k moving expenses and not just try to borrow as much as possible.

My situation is I have not saved a deposit, as a 25% deposit on a property in the South East always seemed too unachievable to bother trying for, even though I have a reasonable income (£30k) and several hundred pounds a month of disposable income. With the government's Help to Buy scheme meaning a deposit of only 5% is required suddenly property purchase seems achievable.

On a £150k property this means £7.5k. I can raise this myself and with parental contributions relatively quickly, but do also have a personal loan of with £6k left to pay (for a car purchase) with repayments of £220/mth on a good APR.

I am in credit on my current account, but this has an overdraft facility of £4.5k. I have heard (from a not terribly reliable source!) that overdrafts aren't factored on for mortgages but loans are. Would I be better clearing my loan with my overdraft, albeit the interest rates are higher on an overdraft?

Alternatively, if having a loan is not an issue, could I raise the deposit quicker by increasing my loan and spreading the repayments over a longer period, meaning my monthly loan repayments stay as they are now?

So, the awkward facts are:
Salary: £30k
Deposit raised: (£0, but around £2,500 parental contribution)
Current loan: £6k, repaying £220/mth

Interested in £150k property.
Help to Buy contribution = £30k if agreed
Deposit required = £7,500k
Mortgage required = £112,500

I suppose the bottom line is: What impact does having a loan have when applying for a mortgage?

Any help appreciated.

noplams

Buyers should follow your guide. It is very important to see all those factors you mentioned.

Eponym

I'm looking to buy around Easter next year and I'm just starting to get together details of things like potential mortgage brokers.

There's a firm near me called Oak Tree Mortgages and the reviews on their site are excellent. They also have superb reviews on http://www.freeindex.co.uk/profile%28oak-tree-mortgages%29_124772.htm which lists them as the top-rated mortgage brokers in the whole country!

My only concern is that they don't charge any fees; it's all paid out by commission - great for me, but my worry is that they'll choose the best deal for them not the best deal for me. I rang them up to ask about this and they said that in your consultation they go through it all with you and show you what commission they get, so you can decide what's best for you.

Maybe I'm being paranoid given the quality of their reviews, but what do people think?

brydo86

Hi folks,

I read the first couple of posts but couldn't find answer....nowadays is a 100% mortgage possible? I cant save up money for a deposit like many others