How much can I borrow?

CheeseOnToast

Hi,

I'm just wondering if any of the 'real world' brokers could advise me on my situation. I am going to start looking for a new house in the next couple of months. and I would like to know roughly what amount a lender would be willing to offer me.

I earn £36,000 p/a basic, I also get £4,200 on-call and earn around 6-10K in overtime. I will likely have around 25K deposit.

I have 2 dependants.

This is the big issue though, I have around 22K in un-secured debts, I can probably nail this down another 2K or so in the next couple of months. Is this going to be a major hurdle?

My credit file is good with no missed payments for around 4-5 years, prior to that there were a few nasties, but just missed payments when I was around 18/19 years old.

Please could someone let me know what they realistically think I could borrow? I have done a few online calculators but am sceptical of them.

Also, could someone do me the same type of maths but including my other half who will be earning around 8.5K p/a (7K salary + 1.5K child benefit) as of September.

Many thanks,

Phil

HarveyGal

I am not a broker but maybe a bump might help.
The 25K deposit is almost wiped out by your 22K unsecured debts - so calculations of affordability have to include that you need to service the 22K debts.
Sorry, I do not know your circumstances but I think you need to repay some of your debts and save more for a deposit.

CheeseOnToast

Thanks for the bump, I think you're probably right, but wanted to know how far off I am really.

I would prefer to be ready to move in the next 6 months really, 12 max. I would estimate I can pay around 5K max off my debts every 6 months. That's without topping up the deposit at all.

I only really want to spend around 140-150K on the house which means I'm going to need to borrow around 120-130K mortgage. I will probably just break even on my current house, leaving 0 equity.

Thrugelmir

Clear your debts. Create an emergency fund. Then save for a deposit.

CheeseOnToast

I already have an emergency fund, and a 25K deposit, what's the problem?

I asked how much I could borrow in my current circumstances, not random advice on what I should do with my finances.

TOBRUK

Hi Cheeseontoast, I am no expert and can't advise you on how much you could borrow. I was just wondering you say you'd probably break even on your current house, so you already have a mortgage is that correct? If you do, how much is your current mortgage and is it portable? You could take your mortgage with you and ask for £x to add to it.

Sorry if I've misunderstood.

Wutang_2

CheeseOnToast wrote: »

I asked how much I could borrow in my current circumstances, not random advice on what I should do with my finances.

What an absolute charmer! God bless.

TOBRUK

CheeseOnToast wrote: »

I already have an emergency fund, and a 25K deposit, what's the problem?

I asked how much I could borrow in my current circumstances, not random advice on what I should do with my finances.

In fairness, your finances are relevant as your current circumstances you said you have £22,000 debt. I have recently re-mortgaged and wanted to borrow another £20,000 as the house I'm buying is going to be between 15 and 20 thousand more than I will get for sale of my house. Any lender will want to know your current financial situation - how much you earn, your savings but also your debts - and they will check. This will determine how much you will be able to borrow.

sammyjammy

TOBRUK wrote: »

In fairness, your finances are relevant as your current circumstances you said you have £22,000 debt. I have recently re-mortgaged and wanted to borrow another £20,000 as the house I'm buying is going to be between 15 and 20 thousand more than I will get for sale of my house. Any lender will want to know your current financial situation - how much you earn, your savings but also your debts - and they will check. This will determine how much you will be able to borrow.

And the OP knows this, they asked how much they would be able to borrow based on the situation as it is now.

VIGILANT22

CheeseOnToast wrote: »

I already have an emergency fund, and a 25K deposit, what's the problem?

I asked how much I could borrow in my current circumstances, not random advice on what I should do with my finances.

Random advice!!...It is in fact very relevant...unless yr buying a shed...:)


YOUR QUOTE: This is the big issue though, I have around 22K in un-secured debts, I can probably nail this down another 2K or so in the next couple of months. Is this going to be a major hurdle?

CheeseOnToast

Just to be clear, I wasn't trying to be rude in my post earlier. But clearly as others have said I am aware my debts will be involved in the process, this is why I was asking. And it's pretty obvious in an ideal world I have no debts and a bigger deposit etc. etc. I am just quite keen to move to the area where my eldest son is in school whilst he's still relatively young, he's 5 now, 6 in November.

Hi TOBRUK, yes I have a mortgage now. I bought my house unfortunately close to the peak, it was valued at 90K at the time (around Jul 2006), I owe 86K on the mortgage now. I have done quite a lot of work to it though, new carpets and decoration etc. It's still really an FTB type of house though. The mortgage is portable so I will approach my lender (Halifax) about porting it and see what they can offer me in terms of an increase in borrowing.

At the end of the day, I know my debts are high, but my fiance is in University and we have two children so it's quite a lot of out-goings, but of course I can reign it in. If I can't get what I need I will just focus for 12 months on clearing a large chunk of the debt.

Thanks for everyone who has replied helpfully.