Can I get a mortgage on a £29k salary?

wonker

You will have to excuse my stupidity, I am new to this financial lark and need some advice before I start making calls to mortgage brokers etc.

I earn £29k a year and am thinking about getting a mortgage on a property which would cost me around £240k.

As a lot of online guides say providers will lend me up to 3-4 times my wage, that relates to around £120k, which is nowhere near what I need (about £200k).

But a lot of online mortgage comparison services say there are providers who offer mortgages to people earning the amount I do and wanting the amount I do.

I am planning on putting down a £35k deposit. Would that be good enough to tempt the mortgage providers to give me a mortgage?

lilyann1

I think you're right most lenders will only lend about 4 times salary,maybe some will lend you up to a max of 5 times.

We are getting a £200k mtge and its going to cost around £1300-£1400 per month.Forgive me but can you afford the repayments on a £29k salary?
I assume thats £29k before tax and so I can't really see how you would afford to make those repayments and be able to live too???
Don't forget you need to have insurance on life and house and be able to eat.
Do you need to buy a house worth £240k,is there anything else cheaper that you like?
Are you getting the mortage on your own or buying the house with someone else,as you can take their salary into account too?
If not get a lodger???

Macgyver_2

Shared Ownership(now called New Build Homebuy)

You can register at https://www.housingoptions.co.uk

There is lots available.You should be proactive and email the contacts though and try and get registered with with the individual housing assosiations, because it is still a new thing.

At your salary you will easily be able to afford that place just a few thousand tantalisingly out of my reach.
I hope you don't have your eye on south London...

johnofhertford

So you're looking for a mortgage roughly seven times your salary. I suppose it's not completely impossible but you'd be relying on a lender who looks only at affordability and I don't see how you could show affordability.

You'd be paying about £750 on an interest only mortgage - can you demonstrate that you can afford that? If so then maybe you've got a chance, but you should be worried about how you would pay off the capital at some time. A lender might decide that it will take your money off you and if you can't pay off the capital then fine, it'll take your house off you.

Do you have any other income or some trust fund maturing in a few years that will pay it off? If not then I wouldn't go near a mortgage of that size on your income.

dmg24

I've heard of high multipliers but seven times?!!!

The phrase 'responsible lending' springs to mind?!

Oddgy

Bloody hell 29k a year, gees im underpaid!! As if i will ever reach that rate. :-(

jamesd

wonker, 7 times income is too much for safety on a normal interest-only mortgage. I could do it on 29k but it's too close for comfort. At a minimum I suggest you work out and live to a budget for 3 months to see what you really can afford. It's not impossible to afford 750 interest-only but you'll be so close to the edge that a 1% interest rate rise will leave you unable to pay.

To be anything resembling prudent you'll need either shared ownership or a price below 200k. Even that is pushing it unless you live cheaply - running a car might not be doable, for example.

You might also investigate 30 year or longer term mortgages if you're determined to do it, since that will get you some room for interest rate increases and you can overpay to reduce the mortgage length when you have more money available. But it's still unwise.

johnofhertford

If he's paying interest only then it won't make any difference whether he has 25 or 30 year term in respect of interest rate increases - may give longer to find the capital from somewhere but no effect on the 750 p.m.

herbiesjp

You can indeed get some affordability based lenders that would look at mortgages between £175 and £200k

Whether or not it would be right for you would need carful analysis of your current circumsatnces

wonker

lilyann1 wrote:

We are getting a £200k mtge and its going to cost around £1300-£1400 per month.Forgive me but can you afford the repayments on a £29k salary?

The thing is my friend who will move in with me is going to be paying me ~£450 pound rent a month and I will pay whatevers remaining.

If I move out from where I live, into London, I will be paying about ~£450 pound in rent anyway.

So if I can get a mortgage which is ~£1100 a month repayment then I will be paying the reamining ~£650.

I don't think thats too hard with some budgeting as I can save on travel costs (£240 atm) by walking into work, partying costs (£300 atm) as I drink too much anyway

wonker

johnofhertford wrote:

You'd be paying about £750 on an interest only mortgage - can you demonstrate that you can afford that?

I would want a repaymant mortgage not an intrest only mortgage.

Check out my reply to lilyann1. I will have a lodger and will be topping up the extra monthly payment.

With bills being shared and some careful budgeting it may work, but I am not sure how I can prove that to the broker/provider.