Mortgage Advice Required For First Time Buyer.

WoodruffsDad

I have just received this email from my daughter:

"How do I find out if I can get a mortgage and what do I have to do?

I have been looking at houses in Bristol that are going for £100,000 and been wondering if I would be able to buy.

I really have no idea about mortgages so any advice would be useful."

I have not owned a house or been involved with mortgages for about 15 years so I am very rusty in this area.

Can anyone point me towards a basic guide which I can pass on?

m00m00

first point : can it be afforded

a deposit of between 10-25k would be needed (with a few k more for moving/legal expenses)

then there's the issue of salary multiplier, she would need between 3-4x her salary, so earning less than 20-25k, it won't be affordable

second point : previous debts/credit history, the lower the deposit the more 'clean' the credit history will need to be, the more existing current debts (credit cards/loans/cars) the lower the amount a bank will be willing to lend.


get the answers to those basic questions, then you can start looking at specifics

holly_hobby

Well .. she needs to be in employment (which can be verified i.e pay slips/reference) or 2/3 yrs accounts if self employed, have a good credit history, be on the voters role, a decent deposit, and monies for other associated fees.

The post is much too vague to give specifics - but the above is very basic information that a lender would consider as part of their status checks on her.

If she is lucky enough to qualify for a mge, she then needs to consider what type of mortgage product she would like i.e a fixed product where her mge monthly payments would be fixed for a specific period of time, or a tracker (variable deal) which will have a lower rate of interest, and lower monthly payments, but would be subject to change on any movements in the BOE base rate - therefore her monthly payments may be subject to change during the term of the product. So her choice would be based on whether she wants stability in her monthly outgoings, or happy (for a lower rate of interest) to accept and be able to financially accomodate a degree of uncertainty, in whether her initial outgoings will change during the term of the product.

I would suggest having a quick chat with a whole of market adviser (check if there is any initial fee for general advice), which will give her an idea on whats what ....

Hope this helps

Holly

xxmatt1980xx

If she's looking for a house in Bristol for 100k, she's going to be heavily restricted to which areas she'll be able to buy in. She's not going to be able to buy anywhere in Clifton that's for sure. So make sure she's fully aware of the pitfalls of buying somewhere in an area she may not know or may be less than desirable to many people (potential future buyers for instance).

Good luck though. Bristol's a lovely place and I miss it terribly sometimes.