Advice for first time buyer?

xanderd

location is OK as we can both drive and most IT jobs are within rail links into London.

I know the obvious solution is to wait a year before getting a mortgage, however we feel like we are wasting time and money renting. We are desperate for our own place and we beleive that we can realistically afford the monthly repayments.

xanderd

My aunt has kindly offered to help by paying off all of our loans.

Could somebody tell me how I would calculate the interest for example if I wanted to pay her back with 5%? Do I add 5% to the whole amount and then pay that back, or is it worked out on a monthly basis?

ALso, would we have to declare this personal loan to a mortgage lender?

many thanks

Joe_Bloggs

You could use a mortgage calculator to work out loan repayments. The Excel function PMT can do the same.
J_B.

jamesd

xanderd, if the loans are student loans at well below market rate, I suggest not paying them off until the mortgage is paid (or until required payments pay them). Or do just enough to get the mortgage you need.

To calculate the interest at 5% you use 0.05 times the amount for each full year.

If you want it monthly, take 1.05 raise it to the power of 1/12 = 1.004074 subtract 1 and multiply by the outstanding loan amount. Say the loan is 10,000, that would be 0.004074 times 10,000 = 40.74 in interest for the month. Add to the outstanding balance, subtract any payments you made that month. Repeat the calculation each month until paid off.

You can do these interest rate/period calculations using View/Scientific and the x^y button in Windows calculator. That 5% annual converted to monthly calculation is via these button presses: 1.05 x^y ( 1 / 12 ) = .

Since no repayments are required on the loan I'd mention it to the broker but not expect it to reduce the mortgage, since it's irrelevant for the mortgage affordability calculation. Check with the broker first, though - no point in doing it if it doesn't help.

regularsaver1

some lenders will take into consideration the likelyhood of your income increasing next year - have you discussed this with the broker

what lenders has the broker looked at, and on what calculation

meanmachine_2

These types of thread really get on my t*ts.

The OP gets grumpy with us because we give bad advice, and only then reveals the full facts of their situation.

As others have said, WAIT.

You won't be throwing money down the drain, as next year you'll be able to get a standard, competitive mortgage on your soon-to-be massive salary.

I know everybody wants everything right now, can't wait, won't wait, etc, but sometimes it is cheaper to wait.

I think the generous offer from your aunt has blinded you to this fact.

Again, this post will make you cross because it's not what you want to hear. But it sounds like the right advice to me.