FTBs - One higher Income

house_help

Hi,

My girlfriend and will be looking to buy our first home later on this year. I have a few questions on mortgages and the impact of certain things.

I started a new job in November of last year, there is a 6 month prob period. We will not be looking to buy a house until after this period is up as we started a 6 month rental agreement when I started the job. My question is whether we should wait to have initial conversations with lenders until the prob period is complete or start these earlier?

I earn £42k PA, my girlfriend currently only works limited hours until she can find a suitable full time job. Her contracted hours would equate to about £5k per year. Should we still be at these levels when we come to borrow how will lenders look at this? i.e. multiple of my salary plus lowers multiple of hers or a lower multiple of the combined amount? I am a qualified accountant if that makes any difference.

We will have around £50k desposit and looking at houses up to a max of £200k. We both have student loans (the government type that come out of salary directly), i have £3k outstanding on one CC at 0% which will be paid off in full before the 0% ends. I have had another CC for several years and pay in full every month, never missed any payments on that or any other bill. My girlfriend has never had a CC (or any other credit) - do you think it would be worth her getting one to build a credit history?

Finally we have looked at a few houses on the market to get an idea of values of something which we would want and noticed a few that have a "local need restriction" (we are in a relatively rural area with pretty low average salariesm where a lot of people move to in retirement). As you would expect such houses at the price range we are looking are selling at considerable discounts to properties nearby without the restriction. We would meet the restricition since we are working in the area, ignoring the discussion on whether buying a house with such a restricition is a good idea how would mortgage companies look upon them / even offer a mortgage with a restristriction in place?

Thanks in advance for any help.

Meeper

house_help wrote: »

I started a new job in November of last year, there is a 6 month prob period. We will not be looking to buy a house until after this period is up as we started a 6 month rental agreement when I started the job. My question is whether we should wait to have initial conversations with lenders until the prob period is complete or start these earlier?

My response would be not to bother talking to lenders at all. Go and see an independent mortgage adviser who can do all of that sort of stuff on your behalf saving you the rouble and ensuring that the information is presented to the lenders in a way which will be most conducive to acceptance.

I earn £42k PA, my girlfriend currently only works limited hours until she can find a suitable full time job. Her contracted hours would equate to about £5k per year. Should we still be at these levels when we come to borrow how will lenders look at this? i.e. multiple of my salary plus lowers multiple of hers or a lower multiple of the combined amount? I am a qualified accountant if that makes any difference.

Doesn't make any difference at all! Every lender is different and they all use different calculations in order to determine how much you can borrow. Another good reason to use an adviser who will be able to find the most appropriate lender for your circumstances and be able to do background checks to ensure that it fits criteria prior to submission.

We will have around £50k desposit and looking at houses up to a max of £200k.

So 75% LTV, that's a good place to start!

We both have student loans (the government type that come out of salary directly)

Many lenders these days will take these into account as they consider your total net monthly income as opposed to your gross salaries.

i have £3k outstanding on one CC at 0% which will be paid off in full before the 0% ends. I have had another CC for several years and pay in full every month, never missed any payments on that or any other bill. My girlfriend has never had a CC (or any other credit) - do you think it would be worth her getting one to build a credit history?

Not really, as a lender may see that as someone on low income trying to live beyond her means and needing a CC to get by. No value in this imo.

Finally we have looked at a few houses on the market to get an idea of values of something which we would want and noticed a few that have a "local need restriction" (we are in a relatively rural area with pretty low average salariesm where a lot of people move to in retirement). As you would expect such houses at the price range we are looking are selling at considerable discounts to properties nearby without the restriction. We would meet the restricition since we are working in the area, ignoring the discussion on whether buying a house with such a restricition is a good idea how would mortgage companies look upon them / even offer a mortgage with a restristriction in place?

It depends on the lender and the location, but generally speaking this would be a no-no for lenders as it would affect future saleability. I did a transaction a couple of yours ago for a guy in Bakewell who wanted to do this and the only lender who would accept the restriction was the Derbyshire Building Society. It may be possible, but you may be restricted to small local lenders who may not have particularly attractive offerings.

Thanks in advance for any help.

You're welcome.

house_help

Just coming back to this I would like to thank Meeper for his helpful post.

We have now completed on our property. We had been searching since my post in Feb but in the mean time had saved a further £5k desposit, i had a pay rise and my GF got a slightly better job (we have had some good luck ). We viewed several houses up to £200k but nothing fitted the bill so given the higher income and deposit we looked at slightly higher priced houses in mid summer. We found just what we were looking for and eventually paid £220k (dep £55k and a mortgage of £165k - about 3.1x our joint income).

Getting a broker was a great help, we knew the type of mortgage we wanted but having someone go out and search the market and come back to you with the available choices and prices of that type of product was a great help. I'm sure it also helped with the speed with which our application was dealt with - we submitted the application on a Wednesday and by the following Wednesday the survey had been done and offer confirmed.

Meeper

Fantastic news! Glad everything turned out well for you.

M.