FTB- How Big A Morgage Can I Get?

thequant

I want to be able to get the biggest mortgage as possible, I know that sounds both difficult and irresponsible in this climate, however the bottom rung is far away I need the biggest jump to reach it!

Heres my position, the properties in question I am looking at the bottom are aroound £200K, but if i find a doer upper or really scrape the bottom of the barrel I have seen places for £160k but that is the absolute min I have found.


My financial position is as follows.

Salary: £40K per year
Debt: £0
Savings: £10 K (saving at a rate of £1k per month)
Current Rent £900 PCM

Credit record: almost perfect 999 out 1000 on experian. However have a string of Defaults but these are in excess of 6 years old, some are not paid off due to disputes over unfair charges by DCA's. Will these affect me.

one other thing, I have equity in the company I work for, worth a min of £100k and am being paid a "Bonus" of £50k a year in equity.

However the equity comes with strict conditions in the shareholders agreement which prevents me from using the shares in anyway as security for loans or selling the shares on the open market. I'm guessing the answer is no, but is there any way I can use them to shore up my position ?

Im interested in

a) what is my current position, if i went out today given above, what sort of mortgage could i get ?

b) to reach my target of a min £160k, what sort of deposit do i need using the best LTV deal to get to this.

Thrugelmir

thequant wrote: »

one other thing, I have equity in the company I work for, worth a min of £100k and am being paid a "Bonus" of £50k a year in equity.

However the equity comes with strict conditions in the shareholders agreement which prevents me from using the shares in anyway as security for loans or selling the shares on the open market. I'm guessing the answer is no, but is there any way I can use them to shore up my position ?

Are these shares held in a private company?

thequant

Thrugelmir wrote: »

Are these shares held in a private company?

Yes private limited, and cant be sold on the open market due to shareholders agreement.

Thrugelmir

thequant wrote: »

Yes, and cant be sold on the open market due to shareholders agreement.

There is no open market for shares held in a private company. So the realisable value currently is quite likely to be far lower than their nominal valuation.

Until the Company's shareholders exit plan materialises you won't realise the shares true market value.

As for a mortgage you'll need a minimum of 10% deposit , if not 15% of purchase price. Borrowing 3.5 times your salary would allow you a mortgage of £140k. So personally I would be looking to save a minimum of £25k to cover the deposit and purchase costs.

Also its advisable to have emergency savings. As house ownership doesn't come without its unexpected costs.

Catatonia

For the best rates, you'd need a 40% deposit, so £64k of the £160k purchase price, plus money for fees etc.