First-time buyer - £30k salary

Pigeon81

Hi All,

I'm a first time buyer, currently earning £30K. I have £10k saved up and looking to buy on my own, (in London).

My plan is to get a new job first and then take a morgage. So hopefully, by the time I buy, I'll be on about £40k.

What are my chances of getting a morgage? I have a good credit rating, no loans, a little over draft which clears each month when I get paid and never been late with payments.

Do you think I could get a 4 x morgage?

Thanks,

Reena.

herbiesjp

Probably get 4 times your income.

But you will need at least 10% deposit - so in London terms that could be quite a lot of money

Thrugelmir

Pigeon81 wrote: »

a little over draft which clears each month when I get paid and never been late with payments.

Is the overdraft interest free?

SilverSix

Why not use a credit card instead of your over draft which would favour your credit rating. If you're clearing your overdraft in full each month, and if it's not costing you anything, then a credit card would be no different.

4x salary is a good amount to assume you can get. I'm not quite sure what you plan to buy or where about in London.

Pigeon81

Hiya,

The overdraft isnt interest free, I get charged a little each month (LloydsTSB), but actually had no idea using my credit card would be better for my rating! Thanks for the tip - all this time (and I'm 30), I avoided getting a credit card, until last year. However, looks like I've been doing the opposite all this time - thank you!!

Pigeon81

BennyC wrote: »

4x salary is a good amount to assume you can get. I'm not quite sure what you plan to buy or where about in London.

Hi Benny, I'd like to buy as central as possible. Preferrably a 2 bed flat, but I know my chances are slim, unless I look around zone 4-6 areas at least.

Not sure if you guys have a view on Shared Ownership? My parents think it's a bad move to go down that route and better to just by outright. I've done a little research and the further out of London you go, the cheaper the rent is on Shared Ownership flats.... just wonder if there are any catches you know of?

Thanks all for your advice so far

ViolaLass

Pigeon81 wrote: »

Hiya,

The overdraft isnt interest free, I get charged a little each month (LloydsTSB), but actually had no idea using my credit card would be better for my rating! Thanks for the tip - all this time (and I'm 30), I avoided getting a credit card, until last year. However, looks like I've been doing the opposite all this time - thank you!!

Why have you been using the overdraft at all when you have savings?

Pigeon81

Well I guess because I just didn't want to touch my savings. And my overdraft is like an emergency pocket, I dont use all of it, only a couple of hundred if my salary gets eaten up, (and not every month either)

noodle

Pigeon81 wrote: »

Well I guess because I just didn't want to touch my savings. And my overdraft is like an emergency pocket, I dont use all of it, only a couple of hundred if my salary gets eaten up, (and not every month either)

If that's all it is, then don't worry about it.. assuming you're not paying any silly fees/interest. Having an overdraft as a buffer, even if it's not technically the most cost-effective option, can be a good strategy and keep you focused on not actually using it! Using a credit card can be more difficult to control, and if you start dipping into savings you might find you never quite get around to replenishing them. (It all depends on how strict you are with yourself).

All that said, it's true that having a credit card will help to build a credit rating, so that is a reason to get one whereby, in your particular case, avoiding overdraft usage probably isn't.

cashbackproblems

30k*4 = 120/130k, there is aboslutely no way you can a 2 bed apartment anywhere near central for that amount, neither in north or west london suburbs. You are probably looking at commuting on the overground and buying somewhere like Oxford or Chelmsford (just off the top of my hat). If you can wait, save and buy with a partner you will have much more chance of getting something decent in lndn.

property.advert

Even at 5 times salary (easy with Barclays - its on their website - if you have a good credit record and a decent deposit (more than 10% - perhaps 15-20%) then your circa £200k is going to buy you next to nothing. It certainly is not going to give you 2 beds anywhere near the centre.

You need to up your salary a lot and quickly to begin to save quickly. Your first goal is £25k being £20k as deposit and £5k for stamp, bills, moving etc.

Reverse the process and look at what you want, work out what deposit you need and if that is not viable, reduce your budget and see what you like and how much that costs. Don't overlook trains and concentrate solely on tube stations - you will find more if you think that way.