Depressing mortgage offer :(

GettingItRight

Hi all!I was looking at my TSB account online today and decided to see how much I'd be offered were I to consider applying for a mortgage. It was not a proper mortgage quote according to the website, just a basic idea. With a supposed 10% deposit I was offered just £25,000 by TSB. It was kind of depressing to read, as the guy in a TSB branch the other day even said to me that I had an excellent credit rating with them.I earnt about £13,500 before tax last year (which I'd consider a good year for me) and I know that is low pay. I was kind of hoping to get a mortgage for a small flat/house in my town, sometime over the next two years. Now I think I'm going to have to apply for a council flat or something, as there is never going to be anything of that value in my town (or probably anywhere in the UK).Other than a higher % deposit and getting paid a better salary, is there any possible way of increasing the amount of the mortgage borrowed? Any further advice is also appreciated.

freesha

Most loans (except student loans) will count against you. So if for example, you pay £100 a month on a bank loan, that will be £100 less they will consider you to have available to pay towards a mortgage, so will lower the amount you can borrow.

cashbackproblems

Did the OP mention that they had any loans??

Firstly your quote was wrong, the standard amount is 3.5+ times you salary so based on earning 13k thats at least 40k+ and most give you more if you have a decent deposit. Id go in branch to a few banks, hsbc are excellent and see the max u can get.

Kavanne

You could buy with a friend? Or look into shared ownership schemes?

May I ask why your wage is so low? Are you just starting a business or part time? Do you have plans to move onwards and upwards?

Otherwise it's just save save save....

EDIT: Cashback... the problem with that low income is the Bank problem has an affordability guide they need to meet which is could be as high as £700 a month (money to live on, pay bills)... only the OPs income ABOVE that could be used for mortgage repayments... as such the income multiple is distorted because of the OPs lower income.

freesha

cashbackproblems - I know the OP did not mention any loans, but quite a few people don't realise that they will count against them, so I thought I'd mention it. Just trying to help.

Gorgeous_George

How much can you afford to repay?

With a £40K mortgage, if the interest rate is 6%, your repayment would be £257.72. At 8% it would be £308.73.

There are so many other bills too. Council tax, electric, gas, water rates could easily be £200. By the time you've paid for food and a few treats there wouldn't be a lot left.

GG

brit1234

Kavanne wrote: »

Or look into shared ownership schemes?

:mad:
Bad advice. You will lose most of your wages on service charge, rent and mortgage. my friends are also having nightmares trying to sell them.

Its just a scam to get you to pay as much as you can for an overvalued property.


Save a deposit instead

ritz55

Would recommend talking to an Independent Broker as I managed to get 5 times my wage on a 35 year mortgage.

Kavanne

ritz55 wrote: »

Would recommend talking to an Independent Broker as I managed to get 5 times my wage on a 35 year mortgage.

Not responsible as the OP is taking home max about £800pm

13500 x 5 = 67500 and my payment was £433 on a mortgage of that size at a rate of 5.something% on 25 years.

Half the OPs income on a mortgage? That leaves them £400pm to pay ALL utility bills AND feed themselves. That's never going to happen unless the OP entirely forgoes heating and hot water and electricity.

EDIT: Just done some calcs and at 5.5% the payment would be £362pm over 35 years... still unsustainable.

GettingItRight

Hi all and thank you so much for replying and sharing your thoughts. My job is in retail and part of it I guess is reliant on a commission being earnt. I'm on £5.99 an hour (£5.9902 to be exact, but I don't like to boast lol). I have a few credit cards, but the whole balance is paid almost every month, otherwise the minimum balance is at least met on time. I once had a loan with TSB about 12 years ago when I was 18, so I could buy a car. I paid back the loan early just after 2-3 months having bought the car and quickly got the money together to repay the bank. Currently I have no loans.My bills simply come to £100 rent money which I give my parents as I've now moved back in with them, until I can get a mortgage. Were I to live in the town where I work, I'd be able pay a good £450 a month if not a little more. Otherwise I'd be looking at about £300 if I lived in the town where I currently am based.I am thinking of setting up a very small part time business on Ebay just to make a little extra money, but this is not going to like a planned commitment requiring £1000s to the idea.I always thought £10,000 might be enough for a deposit, but after this evening I'm having doubts.

GettingItRight

Paragraphs don't seem to happen on any of my posts, after submitting. I'm wondering if IE8 is impacting on this site's display.