Question for MA's, sorry if its a stupid one.

fimonkey

I am confused by the news items saying that FTBs cannot find decent deals, then the money pages showing reasonable deals for 85% LTV for instance.

I haven't the time at the moment to sit down with an MA, and nor do I want to waste their time either but I am curious about where I would stand as a potential FTB.

Salary £31K Gross. Employed full time with no chance of being made redundant (my salary comes from a research grant I hold so it cannot be taken away from me).
Deposit £15K - This would leave me £5K for costs etc (overall I have £20K saved)
No outstanding debts - I pay my credit card in full each month (I was late with a credit card payment last month by 2 days and had a late payment fee of £12 added. Is this the kind of thing that is spooking mortgage lenders? - it was a once in a lifetime 'lateness'). Also is it true that mortgage lending is set to become even harder?

I'd like to know roughly what price range of properties I should be looking at. This depends on what I amount I am likely to be able to borrow, and also the repayment.

Currently I pay £580pm rent with £210 bills and I am comfortable with that amount.

SO please advise me on the price range of properties I should be considering and why.

Many thanks in advance

GMS

Different lenders have different rules regarding multiples and affordability.

Without knowing your circumstances and needs and preferences it is difficult to give an accurate figure.

You should make the time to see an adviser, or at least have a telephone interview.

You could be looking at between 90k and 150k for a mortgage depending upon lender and circumstances.

fimonkey

Cheers for your reply. If my repayments were about the same as my current rent, what would be the price of my property? (Hope that makes sense, re-phrased its £15K deposit plus repayments of £580 = total amount of the property I can buy). I know there will be different interest rates to take into account, I'm just looking for a rough idea.

Also, what kinda MA should I see for this initial chat? I obviously want one who's whole of market, but to be truly whole of market means I have to pay a fee right? (because I've read on here for instance that HSBC mortgages aren't available to whole of market MA's who work on commission only). But for the initial chat I don't really want to pay a fee, I am just testing the waters at this stage and not even committed to buying.

Thanks again

GMS

Whole of Market brokers can charge a fee or not, its up to them. Independent brokers must offer a choice of fee paying or commission from lender.

HSBC mortgages are not available to any brokers, they are direct to lender only.

Too many variables involved to give you any accurate figures for borrowing. What you pay in rent currently has no bearing on what a lender would advance you. Could be that your rent payment would equate to a mortgage deemed to be out of your affordability range.

Best thing to do is have a 20 minute chat with a broker. That way you should be able to get a better idea of what is available in the market.

Have a look on lender websites and try their affordability calculators.

dimbo61

Just had a look on the YBS website and put in your £15K deposit as 15% of value of property so therefore mortgage of £85K on property of £100K and the monthly mortgage payment on a 3 year fix at 4.59% works out at £476.28 a month.
Now there are a number of things as a tenant you dont have to worry about ( building insurance, maintenance, boiler breakdown, etc) so having a spare £100 a month would help.

GMS

dimbo61 wrote: »

Just had a look on the YBS website and put in your £15K deposit as 15% of value of property so therefore mortgage of £85K on property of £100K and the monthly mortgage payment on a 3 year fix at 4.59% works out at £476.28 a month.
Now there are a number of things as a tenant you dont have to worry about ( building insurance, maintenance, boiler breakdown, etc) so having a spare £100 a month would help.

How do you know how many years the OP would want the term to be?

How do you know the OP would fit YBS criteria?

InMyDreams

GMS wrote: »

How do you know how many years the OP would want the term to be?

How do you know the OP would fit YBS criteria?

I don't think dimbo61 was trying to suggest the OP approaches YBS - the OP is clearly no where near that stage yet. I think all the OP was looking for was to see whether it's even worth testing the water or whether all he has is pipe dreams.

So now he knows... if he's been quietly eyeing up £300K properties he now knows he's way off the mark. If £100K is close to getting the sort of thing he was hoping for then he's not going to make a fool of himself when he approaches an MA to discuss possibilities, if and when he actually wants to start seriously looking. Of course it still might not be doable, but he's not going to embarrass himself or feel like he's wasted the MAs time by asking (or the next/last 12, 24, 48 months of his life by assuming he could achieve something that was never going to happen).

As for how many years the OP wants the term to be over, I don't see why 25 years can't be assumed to make the sort of generalisation the OP was looking for.

GMS

Quoting specific lenders and products is potentially misleading and unfair on the OP.

Assuming a 25 year term is dangerous too. No way of knowing age or retirement intentions.

Not nice for OP to read £x only to discover it could double when facts known.

fimonkey

Thanks all. Dimbo you were right to assume a 25 year term and InMyDreams you are also right in that I am just testing the water in a very broad sense. I am no where near the stage of making an appointment with an MA because I haven't really started looking at properties and I have no time at the moment to dig out bank statements, payslips etc etc. GMS, an an MA I understand you need to factor in a lot of variables and I really appreciate your professionalism.

I have had a look at affordability calculators on a number of bank websites now so thanks for the heads up Dimbo. ... I was wondering whether a property of £125K would be within my reach, and also what the maximum within my reach would be - these websites have helped a lot (and I know that by completing the calculators it does not guarantee I would meet their criteria).

Thanks again and best wishes

dimbo61

Sorry GMS did not mean to offend just give the poster some general idea!
Yes I used a 25 year term for the mortgage as most deals are still worked out on that basis.
I only went on YBS because its in my favorites and they do 85% LTV deals.
getting a mortgage in today market is difficult with many hoops to jump through.
So keep saving and build up your deposit while keeping your credit score clean ( no late payments/defaults)

fimonkey

Thanks again.

Will the one late payment (late by 2 days) in the past 4 years count against me? .. Are things really that bad in terms of getting a mortgage? .. I thought it only showed up as a '1' on your credit file if you were more than 30 days late?