income for mortgage?

james2012_2

If someone wanted to buy a house for £158,000 what would their earnings have to be and how much deposit would they need?

redped

http://lmgtfy.com/?q=uk+mortgage+calculator

james2012_2

But those rearch results assume that you know what your income and deposit are, I want the reverse, that is why I asked on here, expecting some knowledgable person would know the answer not pointing me to a google to ask the question

uk mortgage calculator.

GMS

Minimum 10% deposit but the more the better as a general rule of thumb.

As for amounts it is impossible to answer. Different lenders have different multiples and without knowing your full circumstances it would be wrong and unfair to hazard a guess.

Lenders will calculate advances based on income, credit score, number of dependants, credit commitments and other factors.

What are your earnings and what deposit do you have? This will dictate what you can borrow, not the amount of borrowing dictating what you need to be earning.

kingstreet

If you assume the maximum LTV is 90% and the maximum income multiple is 4 x gross income, a property at a purchase price of £158,000 is as follows;-

£158,000 price
£ 15,800 deposit

£142,200 mortgage / 4 = £35,550 gross annual income.

If you have credit commitments, you'll need a higher income to maintain affordability.

At a mortgage rate of 6%pa, a 25 year repayment mortgage would cost you £916 per month and you could expect to have valuation fees and legal costs of around £1,100. The lender may have an arrangement fee for the product you choose. Adding this to the loan will of course increase the monthly payments.

If you save a 20% deposit, the effects would be as follows;-

£158,000 price
£ 31,600 deposit

£126,400 mortgage / 4 = £31,600 gross annual income. Don't forget credit!

At a mortgage rate of 4%pa, a 25 year repayment mortgage would cost you £667 per month and you could still expect to have valuation fees and legal costs of around £1,100. The lender may have an arrangement fee for the product you choose. Adding this to the loan will of course increase the monthly payments.

A higher deposit means less pressure on income, a much better mortgage product and correspondingly lower payments.

james2012_2

Thanks all for the sensible answers, I am not buying the house, a friend is selling and wanted to know who could afford to buy it.

He now knows who the tyre kickers are.

kingstreet

james2012 wrote: »

Thanks all for the sensible answers, I am not buying the house, a friend is selling and wanted to know who could afford to buy it.

He now knows who the tyre kickers are.

He does if he goes through a factfind with them as they walk through the door.

Does he really think his viewers are going to give him their financial details?

james2012_2

Does he really think his viewers are going to give him their financial details?

and where do you work?

I'm a SAHM and he works in ASDA stacking shelves.

I don't think they will be making an offer.

james2012_2

I should add that this is in Scotland and people walk in off the street to view houses, as in we are just passing can we come in and have a look.

WellKnownSid

james2012 wrote: »

and where do you work?

I'm a SAHM and he works in ASDA stacking shelves.

I don't think they will be making an offer.

Made me laugh! A friend of mine's partner is a SAHM, he just got a job stacking shelves... having sold his consultancy for several million pounds plus a big big pension, he just needed something to do and a change of pace...

Don't judge a book by it's cover

beecher2

james2012 wrote: »

I should add that this is in Scotland and people walk in off the street to view houses, as in we are just passing can we come in and have a look.

I've never heard of that in my life. Viewers should always go through the estate agent before coming into your house - they could be anyone!

As for making judgements about people, they could have won the lottery/gained an inheritance for all you know.