What could I borrow and what interest rate and fee's?

fimonkey

Hi All,

The main question is what price range should I look at?

I'm thinking of looking to buy but I'm confused by the myriad of mortgage 'deals' in the tabloids. I don't yet want to contact a mortgage advisor as I've not even seriously looked at anything in the flsh (it's all rightmove at the mo).

I earn £33K p.a Gross and have 25K in savings. Good credit history.

What would be the maximum I could borrow nowadays on a 'decent' interest rate (i.e about 5% or less). I keep reading that 90% LTV deals are coming back, are they worth it or are they huge fee's/interest rates and hard to get?

I also read conversely that you can only get a decent deal with 75% LTV.

Also, has the market returned to 3 1/2 times your salary (so I could borrow 115K, plus my deposit of 20K (keeping 5K for fees etc) means I should be looking at properties up to a max of 135K?? - but then my deposit would only be 15% deposit (85% LTV)

So much has changed in the past two years, a brief lowdown of what I should be looking at in terms of price and what to expect in terms of repayments would be appreciated.

Thanks in advance

TrickyDicky

Ive just got a 90% mortgage, and we were faced with rates in the region on 4.6-5% on a tracker or 6%+ for a 2 year fix. THe deal we got (BOE + 4.09 tracker) has now increased to the market at BOE + 4.39. There are a few providers giving 90% so you do have some choice.

You'll get slightly better than this at 85%, but even better at 75%.

Conrad

Your question is impossible to answer. Most prospective clients say they have a good credit score, indeed you will find many a post here where people say thier score is 990 yet thier lender wont lend them 'enough'.

Lenders use software alogorythms that take dozens of factors into account in order to decide the max borrowing limited. There is no rule of thumb anymore other than to say 2.5x joint basic income is usualy achievable.

You will only know by actually running an agreement in principle with a lender.

As for what are rates and fees like for different LTV's, well you've had a look yourself so you probably have a good idea anyway. The only comment worth making is that the deal gets better with higher deposit, but then you al;ready know that.

Simply work out the maximum deposit you can muster, then chose a deal then apply, period.