Buying 1st house with girlfriend

jlo2010

Hi all,

I am looking for a bit of advice...

My girlfriend and are currently looking to buy our 'first house' together. I currently own a Shared Ownership property (50% stake in a £135k property) and my girlfriend lives with her parents (never had a mortgage).

Unfortunately, I took out a 100%LTV mortage in late 2007 for £65k (50% Shared ownership mortgage) on a flat. This was a fixed 2yr fixed mortgage but I haven't changed after it expried, as the current rate is lower than remortgaging. With the recent recession, I expect that if I sell my property now I will lose about 10k - so I am in effect in "negative equity" I guess and I will need to cover any loss when I sell.

Luckily, since buying I have managed to save about £30k which should cover any loss on my property and allow us to put forward a 10% deposit on a new home.

We are looking at a properties circa £170k... so with a 90%LTV mortgage (max we could afford after fees etc) we'll need a £153k mortgage.
- Employment: We are both in full time work.
- Joint annual income: approx £60k before tax.
- Debts: Debt free (however we both have outsanding student loans to pay off).

My first question is will we qualify for first-time buyer joint mortgage?
I have no clue what types of mortgages we should be looking at, or what in fact we'd be eligable for.

This is of course assuming I can sell my flat in the current market!!

Any advice would be appreciated at where to start.

Many thanks. :T

seraphin_2

You wouldent qualify for a ftb morgage, you have a morgage now, so thats a no.

With regard to morgages, they will take your current 100% morgage off what they would lend you, if i were you id sell your flat first then look into it, or see a financial advisor whod be better at dealing with specifics.

You may take a long while to sell yours in this climate im afraid to say, so id start there.

Hope that helps

getmore4less

Whats the GF bringing to the table?
Whats the exit plan?

Why not live in the flat for a bit and save even more before commiting to a larger more expensive place?


You will need to check you can sell the place and if there are any restrictions imposed by the SO provider..

jlo2010

Hi again, :T

My g/friend and I have discussed this and we will both sign a Declaration of Trust/ Cohabition Agreement to state that I would be putting deposit down, however, we be going 50:50 on mortgage and all bills. Seems the most sensible way to go.

When you say "they will take your current 100% morgage off what they would lend you", sorry I don't quite understand fully what you mean here? I assume...

Say the mortgage we are looking at is £153k (minus our initial 10% deposit). My current mortgage is at about £64k (an initial £65k mortgage so I've basically paid off interest!). By what you say, does that mean we would essentially have to be able to borrow £217k (i.e. £153k + £64k) based on our earnings. If so, I think we should be ok given we have a joint salary of about £62k

Given we won't be elegible for an FTB (First Time Buyer) mortgage will we realisitcally be able to get a 90% LTV mortgage in current market? Our plan is to live as we are until end of the year and look to buy early 2011... so we should be able to save a little more.. possibly a 15% deposit max.

Thanks.

jockosjungle

Why not just live together in the flat?

maninthestreet

As jockosjunle states, live in the flat together, then eitheer save your money for a bigger deposit, and/or make overpayments on your exisiting mortgage to get yourself out of NE.