Next Time Buyers

NY_Girl

Hi Everyone

My husband and I are contemplating our next move in the next year from a two bed terrace to a family home. We live in greater London and so houseprices are high so trying to get a family home is going to be difficult.

This is along the lines of what we are thinking: -

To buy a three bed semi we would be looking at minimum £300 - £310,000.

Oustanding mortgage is approx £199,000 and house recently valued at £225,000 (bought at the height of the market and overpayments have kept us out of negative equity).

We currently have savings of £15,000 (currently saving £1,600 per month so this pot should increase over the next few months). Even so taking into account stamp duty etc. I think we are looking at a 10% deposit.

Salary:

Me
Basic: £32,500 Bonus: £2,000 - £4,000 pa

Hubby
Basic: £36,000 (going up early next year to £42,000) Overtime average £100pm

Debt:
Interest free finance of £2,800 - £100 pm (could pay this off if necessary but as interest free havent as yet)

My first question is do you think we would get a mortgage based on these figures? We are currently with C&G on a fabulous standard variable rate and so the ideal would be to port than and borrow the additional. My second question is if we were able to get a mortgage based on these figures are we overstretching ourselves? Feeling a bit wobbly about it all.....

Any thoughts gratefully received.

firstaspect

You should be able to get a mortgage with 10% deposit and with enough money on both your salaries. You may have to be choosy on lender for those offering 90% LTV and because it would be a large mortgage. I would recommend paying off the interest free finance as debt is debt, it will still be on any credit search they do.
Repayments wise basing on 5.99% fixed (which Santander do with 90% LTV) you'd be looking around £1700 a month.

NY_Girl

Thanks for your comments, I think we are just trying to come to terms with the large figures involved!

pjcox2005

I guess an element is London prices and the other is attidude to risk but that seems a substantial mortgage based on salaries.

If one of you lost your job, or started the family leaving one income then a mortgage of £1,700 per month plus bills is basically everything from the after tax take home pay of the highest earner (when they get it next year) i.e. c£2,500 (ignoring interest rates going higher than current levels).

Someone more knowledgable about mortgages can help but reading current press I'd be surprised if anyone would offer 3.5 times combined salary with only a 10% deposit on a mortgage that size.

As I say, could be wrong, but just my initial thoughts.

NY_Girl

Thanks for your thought pjcox2005. We realise it would be high mortgage and we are weighing up the risks at the mo. I am quite confident that my job is secure and my husband is in the police force so, again, pretty secure.

Starting a family is a valid point, it is on the cards but not for a few years and I have come to terms with the fact that I will have to work although of course that will mean nursery fees.

In relation to your last point I would be interested if anyone knows if there are any mortgages available for more than 3x income with a 10% deposit?

Thanks again.