FTB - 100% mortgage..HELP!

andrew_xlb

Hi there,

I am a first-time buyer (or am hoping to be) and desperately need some advice!

I have outstanding debts (credit cards and a loan) but my gross annual salary is £35,000 - I really want to buy a 2 bed flat I have found in the London (zone 2-3) area..the property is £125,000 - but I have no deposit..!

Is it best (or would I even get a mortgage) to do 100% mortgage? Or should I work out some other way to get myself out of debt more before embarking on this..!?

I am unsure really as to whether I can even get a mortgage with outstanding debts (currently totalling about £14000!)

PLEASE HELP!

herbiesjp

You may have a couple of options.

However, just because you could get the mortgage agreed would not necessarily mean it is the righ t thing to do

How old are you? Are you employed or self employed? WHat is your occupation?

andrew_xlb

Hmm, that's what I am not sure about - IE best option!

I am 26 and in full time employment in IT with a dot com company..

meanmachine_2

Careful Andrew, a zone 2 flat for 125K sounds very cheap to me. If it's a private sale between you and a mate/relative, then OK, but if it's an open market one, why is it so cheap?

Also, you earn a good wage, but have debts. Why is that? To run a property takes financial discipline. Boring but true.

benjus

100+% mortgages are definitely a bigger risk than standard mortgages, but with financial discipline it can work out well. In 2003 I took out a Northern Rock "together" mortgage (actually a combined mortgage and unsecured personal loan at the same rate) for 125% LTV. I used the amount over 100% to pay for the purchase costs and renovation work on the house. Last year I was able to re-mortgage to a standard mortgage at 75% LTV. My alternative would have been to stay in rented accommodation for longer while I saved a deposit. I saved quite a lot of money by buying earlier.

MikeP_5

You need to ensure that you can afford any mortgage you take out - as a rough idea, a £125k mortgage over 25yrs on a repayment basis would cost you around £800pm. Add to this the cost of servicing your debt, the running costs of the house etc etc, and you may be struggling!

You would be able to get a 100% mortgage - as long as you haven't got any CCJ's, defaults, missed payments etc. Be careful though, some mortgage rates are not what they seem and have hidden penalties, tie-in periods etc.