Advice needed...

riding_high

Hi, not sure if anyone can offer some advice or whether this might just be a bit of a pipe dream, but here goes...

I have seen a house in an area I like on the market for £145000 it needs a fair amount of work but others in the road are on the market at £170k+

My partner and I bought our house about 6 years ago with a £90000 repayment mortgage and a £10000 deposit. Judging by our 2 immediate neighbours house sales and the improvements we have made/advantages our house has over theirs, I don't think we will be affected by negative equity, if anything could still turn a profit:j

I bring in just over £1600 a month and my partner earns a minimum of the same but usually around £1800 sometimes higher due to overtime. We have about £6000 savings (I realise this would not be enough for a deposit and I am guessing that 100% mortgages are a thing of the past in our current economic climate). Our largest expenditures we pay out each month are the mortgage and car loan which total about £700.

Based on this information, what are the options, if any, available to us to purchase this house?

In an ideal world, I would be able to buy the £145k house on my salary, and my partner could continue to pay the mortgage on our current house and contribute to the works needed in the pipe dream house... is this a possibility?

I am naive to all the costs involved so please feel free to crush my dreams... my partner has already told me buying this house without selling ours first is a non-starter!

Cannon_Fodder

Listen to your partner.

TrickyDicky

You are going to need 14.5k deposit plus enough money to cover a solicitor, stamp duty, estate agent fees for selling your existing house. So I recon you will need a pot up to around 20k. This can come from your savings and any equity you have in your current house. This will only give you a 10% LTV which wont get you a favourable rate - about 6% for a fix or 4.6% on a tracker.

Any repairs you will probably not be able to borrow for - lenders tend to lend against the current value, not the potential value. So you would need these in savings too.

As for whether you could do it on 1 income - £130k (that you'll need to borrow) you would need to have an anual pre-tax income of around 32k, which I dont think you bring in. But thats a rough guide of 4x salary.

Good luck with the house - Im sure someone else knows more than me

riding_high

Thanks for the advice trickydicky, your advice was helpful, informative and politely put! :beer: