24 yrs old - what mortgage can I get?

cupid_s

Joe_Bloggs wrote:

How did you save up £13K ? This is a very rare occurence.
J_B.

when me and hubby bought our house 2 years ago we had over 38k saved towards it and that was after paying for our wedding in the same year. I was 21 (and had/have been a student forever) he was 22 (and has worked full time for a total of 18 months of his life as he is a student also)

it is not difficult to save up a decent deposit. i don't know why people make such a fuss about it!

incidentally we found HSBC to be the best and most helpful people and have a special graduate mortgage if you've graduated in the last 5 years.

AndrewSmith

Firstly tread with a little caution when basing your buying power on an affordability calculator from a lender's website.

These calculators work on very basic information and take no account of the why's and wherefore's of an application.

Also remember that they are geared towards enticing you in as a customer. Thus they are always going to show you a figure that will appeal to you ie the absolute highest amount that you are able to get.

All to often I am contacted by people who tell me that they have a 'mortgage agreed' for x amount when in fact all they have done is used an affordability calculator on a website. They then become disappointed when they, against my advice, submit a direct application to that lender for the full amount only to have the application refused or returned with a far lower amount based on their actual circumstances.

The advice I generally give to clients in this scenario is this:

Work out a budget planner and make it realistic including everything you are likely to spend out. Based on this work out the maximum you could afford to spend each month on mortgage repayments.

What I then tell them is to only go for mortgages that do not go over 90% of this maximum budget figure.

There is nothing clever about being able to borrow ridiculous amounts of money such as 6-7x income. In an enviroment of potentially increasing interest rates and a slowing property market it is, in fact, a recepie for disaster.

After all, if one borrows 7x their income I bet it will not be themselves they blame when they are being reposessed through not being able to afford the repayments.

hethmar

Im amazed by lots of points here!! :money:

Not only that you have saved up that amount of money whilst still having loans,

nor that you can expect a what 50% rise so quickly,

but how come a young chap with all this acumen cant work out how much he can get as a mortgage?

There are lots of online B.S. sites where you could do this easily.

Joe_Bloggs

@Hethmar
AndrewSmith pointed out why the suggested lending amounts of certain mortgage sites should be treated with a certain degree of scepticism.
It is to the young man's credit that they asked on this site for advice.
The general situation seems to be, 'I've got debts of £25K and I need all debts added to a 100% first time buyer mortgage'.
J_B.

MortgageMamma

Excellent advice as always Andrew

tomstickland

when me and hubby bought our house 2 years ago we had over 38k saved towards it and that was after paying for our wedding in the same year. I was 21 (and had/have been a student forever) he was 22 (and has worked full time for a total of 18 months of his life as he is a student also)

Er, how would a typical 21 year student save £19K unless they made £2K per annum for the previous 10 years, or inherited it?

zag2me

When I lived at home I was saving upwards of £1500 a month towards my house deposit.

It's certainly possible if you've got the willpower.

tomstickland

You need an income though as well - you can't create money from willpower.
Even at £1500 per month then 20K would take around 2 years. Who earns £1500 take home per month at age 19?

BTW I was saving around £1K per month last year when I lived at home with parents.

Henry_Blofeld

hethmar wrote:

Im amazed by lots of points here!! :money:

Not only that you have saved up that amount of money whilst still having loans,

nor that you can expect a what 50% rise so quickly,

but how come a young chap with all this acumen cant work out how much he can get as a mortgage?

There are lots of online B.S. sites where you could do this easily.

First of all, thanks to everyone who's replied, I certainly seem to have a clearer picture now.

Hethmar - I caveated my initial post saying that I realised there were standard multiples but I wasn't sure whether special circumstances would be taken into account. Also, it's a no-brainer saving up in ISAs etc instead of paying off loans with nominal interest rates. No need for your sarcastic comments.......

Re my job, it's a graduate scheme at a well known employer so they have a fairly defined career path as long as you pass your exams. That's why I can have a fair expectation of the big pay jump.

I am not really prepared to curb my lifestyle but I do think that, even at my current salary, I could go interest only for a year and let my savings take the brunt of any shortfall.

Big decision to make

danrees

Henry - trainee accountant eh?