First time buyer advice needed pls

nikaia

Hi everyone

Wondered if I could get some advice on a FTB mortgage application. My partner is employed and earns £32k, whilst I've been self employed for the past year. We've been saving for years for a deposit, have no debt and 'perfect' credit histories, but I'm a bit confused about how much we may be able to borrow.

With our saving plus some inheritance we're due to receive we're hoping to have £100k deposit ready in the next few months. We would like to borrow £240k. In the current mortgage market, would it be worth us waiting until I can show 2 years of audited accounts and making a joint application next April, or is it unlikely I'll be accepted as a joint applicant given my self employed status? I earned circa £3k in 2010/11, and expect that figure to be about £10k for this financial year.

Any advice would be greatly appreciated
N

GMS

With your 10k and partners 32k you are 42k joint. You are looking at almost 6 x income for what you want. Very difficult to get that kind of income multiple.

May be better to look for a cheaper property.

nikaia

Thanks for your reply. What would be a more reaslistic income multiple, and is it likely that we would be able to make a joint app if I have to self-certify my income?

GMS

All lenders are different for income multiples as they tend to use an affordability calculator. All are set differently.

There are no self cert mortgages available in the market and even if there were you would need to inflate your income substantially which is not recommended. Lying about income would be fraud and the consequences potentially damaging long term.

Speak to a broker to see what your options are.

opinions4u

An objective in life should always be to borrow less than lenders would let you have.

Your combined incomes after tax are what - £2,500 a month? Maybe a tad more.

£240k over 25 years would have payments of around £1,420 a month at 5%, but 10% would cost £2,200 a month. When I took my first mortgage out the rate was 15.4%. That was less than 25 years ago. Could you afford the £3,170 a month payment for that in addition to other living costs?

I think you need to sit down together and get a reaosnable estimate around how much owning a property really costs.

Mortgage, council tax, gas, electricity, phones/internet, TV and licence, insurance, life cover, food, repairs, ground rent. Consider breeding or other impacts on lifestyle. How would you find your outgoings if you lost an income to maternity leave? How would you fund the cost of nursery care on return to work?

Getting the "dream house" today may sound like a good idea. If it's affordable and sustainable it may even be a great idea. But if you are overstretching yourselves or failing to anticpate changes in the future (economic or personal) it could basically cost you a home, your relationship, your business and your sanity.