Will my girlfriend's job stop us getting a mortgage?

WalkinX

Hi

My girlfriend and I are thinking about buying our 1st house and there are a number of issues I reckon I need to know about before we can do so.

My first concern is my girlfriends job. She works in the creative industry and is currently a dresser in the West End. This job is for a fair while but it is not a yearly slaried job, she gets paid weekly and if the show doesn't get extnded then she is out of work unless she finds another job. I have heeard that those in the creative industry find it hard to get mortgages e.g. actors, dancers etc. I have a full time "normal" job though am an aspiring writer so hoping to be able to do that full time so then I would be a in the creative industry to. Do people in the creative industry have a hard time getting mortgages?

I have requested a brochure from this site but I really do need help. I don't know alot about mortgages and I have dsypraxia & dyslexia so my understanding of numbers and all that stuff is very hard for me to understand.

We also live in London so it's expensive - more then Leeds where I moved from.

I guess we both have student loans still to although mine is only small.

Any help is appreciated.

thanks

Conrad

Walkin there are sources that can take a view on such employment situations, but a minimum 10% deposit will be required.

You need to get the mortgage approved prior to finding a property. A fees free broker will want to sell you insurance, just so you're aware 'free' does'nt really mean free.

WalkinX

10% Deposit of the price of the property? Is this always required?
Can you find a mortgage that is less then 25 years but still with sensible repayments?
Are "interest free" mortgages worth it?

Do brokers always require a fee then?
Why would they sell insurance? Insurance on what?

Thanks

JasX

WalkinX wrote: »

Are "interest free" mortgages worth it?

I'd like one of those :rotfl:

beecher2

WalkinX wrote: »

10% Deposit of the price of the property? Is this always required?
Can you find a mortgage that is less then 25 years but still with sensible repayments?
Are "interest free" mortgages worth it?

Do brokers always require a fee then?
Why would they sell insurance? Insurance on what?

Thanks

Yes you need at least 10% of the price of the property as a deposit. You also need money for fees.

You can have as long a term as you wish - the repayments will depend on the size of your property.

You will need to prove you have a repayment vehicle for your mortgage if gong interest only which is what I think you mean - sadly there are no interest free mortgages

WalkinX

!!!!!!.

See what I mean? That's my damn dyspraxia thing playing up. I did indeed mean "interest only". D'oh!

10% of a property price? In london that's going to be a hefty amount right? I guess you can get a loan for the deposit but I wouldn't want to do that.

Guess they did away with those "whole payment mortgages".

So repayments depend on property size and not mortgage amount?

VIGILANT22

JasX wrote: »

I'd like one of those :rotfl:

I was more apprehensive/intrigued with the title of the thread!
" Will my girlfriend's job stop us getting a mortgage?"

_Andy_

A loan for the deposit won't work as no mortgage lender will accept that as a suitable source.

beecher2

WalkinX wrote: »

!!!!!!.

Guess they did away with those "whole payment mortgages".

So repayments depend on property size and not mortgage amount?

I'm not sure what a whole payment mortgage is. Repayments depend on the mortgage amount. If you don't have a deposit saved, you need to get saving - keep an eye on rightmove.co.uk and see if there are properties within commuting distance which might be more affordable. You can work out what level of deposit you'd need by looking.

ninky_2

it's not so much that people in the creative industry are singled out but that anyone who isn't in a salaried permanent position is (rightly tbh) considered a greater risk to lend to. therefore they will find it harder (and sometimes impossible) to get the mortgage they need.

in previous years, your best bet might have been a "self-cert" mortgage. this was where you basically said what you earned and didn't have to prove income. as far as i know such mortgages as now pretty much non-existent. the alternative if you are self employed is to show three years of accounts. the lender will then take the view that if you have earned that in previous years you should continue to earn that.

a further option is to have someone act as guarantor for your mortgage (e.g. a parent). however, if you default on the mortgage and they are unable to bail you out financially they could lose their own home so personally i wouldn't want to recommend that option.

prices in london are still way beyond what most people starting out can afford. i believe the average age of a first time buyer who doesn't have the benefit of parental help is now 37. in london, where prices are higher, it's probably even older.

what do you think your combined annual income is?

LittleMissAspie

WalkinX wrote: »

So repayments depend on property size and not mortgage amount?

Umm no. It looks like you need to a lot of reading to see how the whole thing works.

But basically, you will need a 10% deposit at least, plus money for fees. So if you want to buy somewhere that costs £150k, you need £15,000 in savings, plus another £5,000 or so for fees. Your fees money will have to pay for stamp duty, solicitor fees, mortgage fees, any furniture you need and your moving costs. £5,000 sounds a lot but that's what we've got budgeted, and after doing my sums we will probably only have a couple of hundred left, and we don't even need furniture.

So if you were buying for £150k, you would then need to borrow £135k. Because you have a 10% deposit, this would be called a 90% LTV mortgage. This means you are borrowing 90% of the price. The more deposit you have the better, because the higher the LTV percentage, the worse the interest rate. I'm not sure on current rates for 90% LTV but let's say the interest was 6%. The BBC has a handy mortgage calculator:
http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml
Which shows that your repayments would be about £880 a month over 25 years.

You would probably go onto a new mortgage deal after a few years and the rate might be higher so make sure you can afford more than the repayments. You will also need to be able to afford the repayments by yourself while your girlfriend is out of work.

The amount you are allowed to borrow depends on your salary. Usually it's something like 3x your earnings. So to borrow that £135k you should be earning at least £45k between you. But mortgage lenders want to see proof of earnings, like payslips and P60s. So yes I'd think you'd run into trouble with an unstable income.