Buying a home

smj43

I have had a thought today about buying my first property. Now, I have literally no idea how it all works and even if I would be eligible to buy. I am literally just about to go into renting a property, but thought maybe it would be best to see if I can buy before it's too late. Once I'm in a rental, I will never be able to save a deposit.

So, I earn about 20k. My partner doesn't currently work, but will possibly be going back in a few months. We have about £10K saved so far.

Would I be able to get a mortgage on this income? And how much would I need for a deposit on a £180k property?

00ec25

there is no way on earth you can ever afford a £200k property on your present income and deposit - banks do not lend 10 times your income anymore - ever heard of what caused the credit crunch in the first place ... reckless lending

read up today's budget announcement over help with deposits for FTB

smj43

00ec25 wrote: »

there is no way on earth you can ever afford a £200k property on your present income and deposit - banks do not lend 10 times your income anymore - ever heard of what caused the credit crunch in the first place ... reckless lending

read up today's budget announcement over help with deposits for FTB

I realise this. I didn't say I wanted a 100% mortgage though. I asked how much deposit I would need to be able to afford a property around the 200k mark.

I have seen shared ownership new builds advertised, these are far more affordable at £70k for 30%. Would I be more likely to be able to do this?

daisymay2008

you would need 10% deposit plus solicitors fees no stamp duty if ftb plus cost of furniture etc

smj43

So realistically there is no way I can afford to buy a 200k property on my income in London. I would have to move out of London and commute. I think a 60k mortgage with 20k deposit, so a total of 80k. Does anybody know any areas not too far from London where I can get a 2 bed flat/house for this price?

harrythefurrysquid

You could afford properties in towns away from the south east, like Wellingborough, which is about 50 minutes from St. Pancras by rail (I used to live there).

£75K will get you a perfectly acceptable 3 bed semi, with a nice big garden, choice of schools, and 10 mins amble to the town centre.

But I think the commute (Midland Mainline) would be rather expensive -- I'd be looking for a job in the local area instead.

Gleeful

smj43 wrote: »

So realistically there is no way I can afford to buy a 200k property on my income in London. I would have to move out of London and commute. I think a 60k mortgage with 20k deposit, so a total of 80k. Does anybody know any areas not too far from London where I can get a 2 bed flat/house for this price?

I think you're very optimistic!

smj43

I could easily transfer from my current job. My company has locations all over the UK so I could easily move. Though I don't really want to move out of London myself. Would it be viable to just buy somewhere outside London and rent it out? Would the rental income cover the mortgage?

00ec25

smj43 wrote: »

Once I'm in a rental, I will never be able to save a deposit.

smj43 wrote: »

Would the rental income cover the mortgage?

no mortgage company would let you buy a property for you to live in using income from a rental property you own - this is because the rental income is not guaranteed and therefore for your residential mortgage the amount you borrow can only be based on a multiple of your salary - you cannot top up your salary with rental income (anyway there is no way you should even be thinking about becoming a LL until you know a lot more about it)

Sadly getting started with owning in London is very hard and given the figures you mention you need a take a very hard reality check

if you won't be able to save anything(?) towards a deposit once you are paying rent then it's unlikely you can afford to own a house at this time and certain that you can't afford to become a LL if you have no spare cash to cover repair bills etc on either property

as for where can you live elsewhere do your own research on rightmove using your 80K figure (and remember to include an allowance for solicitors costs, commuting costs and food.)

as for shared ownership use the "search this forum" function to look at posts about them - the general opinion is to avoid them. Remember you have to pay rent on the bit you don't own so if you are maxed out on your mortgage you could be living on bread and water after the mortgage, rent, council tax and utility bills are paid