Wanna buy my first house,but dont know where to start

alirob12

Hi I am seroiusly thinking of buying my first house together with my girlfriend, however not sure where 2 start and what we need etc., we are looking for a small 2-3 bed house up 2 130.000, but think we may have a problem obtaining a morgage for that amount, we r both employed and earn 800/month - but this is all our spending money - dont have to pay anything at all even food, or rent (just 20£/month mobile bill, 250£/yr car insurance and 105£ tax/yr) thats all our payments as our company covers everything else,

we owe about 8000£ on credit cards but also have about 17000 in high interest account and invested about 25000 in buying land (half an acre abroad and made a start in building a villa), I guess we could afford about 10000 deposit and even 600-700/month for mortgage repayments, so would anyone know what is the best way to proceed now, what sort of offers are the best, what mortgage rates are considered as low etc,?

thanks a lot in advance for any information!!:D

MortgageMamma

Can you be more specific about your earnings? whats your salary before tax? do either ofyou have any other income such as overtime, guaranteed bonuses, commission, working families tax credit?

If you are both earning just 800 a month net plus you have the other finance to consider it is unlikely you will get a 130,000 mortgage, but I'm hapy to assess and give you a realistic budget

flang

I earn 14,000 a year and have been offered a 80K morgage however i do have a very large deposit.
I think as long as you have a deposit and you can prove that you can afford to pay a 130k morgage i dont think your have a problem getting one.

AndrewSmith

flang wrote:

I earn 14,000 a year and have been offered a 80K morgage however i do have a very large deposit.
I think as long as you have a deposit and you can prove that you can afford to pay a 130k morgage i dont think your have a problem getting one.

Not true,

Regardless of the size of the deposit, lenders will still have criteria that you will have to meet. Be this either by income multiples or by affordability.

Every lender will have it's own criteria to apply, if you don't fit it, you don't get the mortgage.

It is not simply a case of proving you can afford to make the payments.

AndrewSmith

alirob12 wrote:

Hi I am seroiusly thinking of buying my first house together with my girlfriend, however not sure where 2 start and what we need etc., we are looking for a small 2-3 bed house up 2 130.000, but think we may have a problem obtaining a morgage for that amount, we r both employed and earn 800/month - but this is all our spending money - dont have to pay anything at all even food, or rent (just 20£/month mobile bill, 250£/yr car insurance and 105£ tax/yr) thats all our payments as our company covers everything else,

we owe about 8000£ on credit cards but also have about 17000 in high interest account and invested about 25000 in buying land (half an acre abroad and made a start in building a villa), I guess we could afford about 10000 deposit and even 600-700/month for mortgage repayments, so would anyone know what is the best way to proceed now, what sort of offers are the best, what mortgage rates are considered as low etc,?



thanks a lot in advance for any information!!:D

£10,000 deposit on a purchase price of £130,000 = 7.6%

This will mean a mortgage of 92.4%.

At this level of 'loan to value' and considering you have £8,000 or credit cards you will struggle to get much more than about 3.75% your joint before tax annual income.

Even with an affordability based lender I doubt that you would get much more than this.

Andy

MortgageMamma

Agreed. You would be stretching yourself too far - I would say its more sensible for you to stay under 100k, 90k if you can manage it. What do you do for a living? are you on a career path with structured payrises?

alirob12

hi we both work 4 a charity and the 800£ each is purely spending money, we are going to pay off the outstanding credit cards within a couple of months and all the outstanding debt on cards is of course at 0%, we have 17k which was originally planned for our villa abroad but will probably use it for the deposit, lets say 15k - deposit, and then would like to be paying 600-700/month. i wanna get a different job shortly - start in october or november and am looking to get around 15k/year. there are a couple of houses we liked for about 120k or 125k asking price so could possibly get it for around 120k. does this look any more realistic?? what are the best mortgage providers (cheapest) we can start looking from? any idea what is the current rate?
thanks for all the comments so far!!:D

Financial_Savvy

What is the interest rate on the £8K on the credit card? What interest rate on the £17000 in high street account? May be better to pay off the Credit Card debt with the savings.

Don't forget if Interest Rates rise then the mortgage payments could rise even if you are on a fixed mortgage and the end of the mortgage term. This could cause you more problems.

AndrewSmith

Even if you both earned 'salaries' of the £15,000 that you speak of each, you are still only likely to get approx £100,000 on a mortgage Maximum.

I think you need to set your sights a little lower.

MortgageMamma

agreed, the 800 each you earn will be going towards mortgage payments and household running costs, so unless you receive some sort of housing allowance or large town allowance or some other sort of subsidy that will continue when you purcahse a property you really need to stick to under 100k. not trying to dampen your ardour for property purchase, just trying to keep you realistic, as your payments on 90k will a stretch, beleive me, you will thank us for it!

Financial_Savvy

alirob12 wrote:

we owe about 8000£ on credit cards but also have about 17000 in high interest account and invested about 25000 in buying land (half an acre abroad and made a start in building a villa), D

£17000 (savings) - £8000 (credit card) = £9000 + £25000 (land) = £34000.

Could you use the £25K invested in the land to help with the deposit and then one of the mortgage gurus (AndrewSmith or MortgageMamma or others) get you a good deal on a mortgage?