Need mortgage advice - we have no clue!

Savingthepennies_2

Basically my husband and I are renting a house at the moment but we REALLY want to get on the property ladder.
I am a stay at home mum so have no income myself, my husband earns £12,000 a year.
What kind of mortgage could we get?
We could probably get together a deposit of about £5000 at a real push.
Thanks.

raq

Savingthepennies wrote:

Basically my husband and I are renting a house at the moment but we REALLY want to get on the property ladder.
I am a stay at home mum so have no income myself, my husband earns £12,000 a year.
What kind of mortgage could we get?
We could probably get together a deposit of about £5000 at a real push.
Thanks.

Someone will be along soon with much more information but I know if you claim wftc and tx this is also taken into consideration.


Good luck

Savingthepennies_2

Really? I didn't know they took WTC into consideration, we get that, can't remember how much though, my brain is a sieve sometimes!

UK007BullDog

Income is quite low so I would think its going to be 2.5 x or 3 x income. So you are looking at £36,000 to maybe £40,000 (optimistic).

How many kids do you have?

what other income and amounts?

Any loans or CC's outstanding?

What are the property prices in your area?

Savingthepennies_2

We have one son (a year old).
We get WTC of £83.94 every 4 weeks and CTC of £165.42 every 4 weeks.
My husband does get approx £2000 a year commission on top of his pay but we've been told they don't take that into consideration.
No loans or CC's.
The house we want to buy is £120,000.

-1-

I'm in the same boat.

I'm self employed with around £15k a year and my fiancee works full time on £16k a year (upto £20k with overtime). We are first time buyers and have no clue how much we would get.

millsy1980

Standard income multiples range from 3.5 to 4 times the main income or 2.75 to 3.5 times a joint income. This is after any outgoings (loans payments or credit card payments) have been deducted from your income.

Some lenders use an affordability calculator and this can workout better. For example I came across a lender called Freedom Lending whose affordability calculator can onlt be described as mega IMO. Be mindful that they do not deal with the general public direct and can only be accessed via a broker.

Subject to there being no outgoings, with the examples above -1- could get around £159,793 Full Status, and if you self certed with the overtime £175,250.

Saving the pennies could get £86,328 if you were to self cert with the tax credits and overtime.

One note of caution, is that although these figures look bigger than most lenders you must always check your affordability. Set yourself a budget of what you could afford to pay each month on your mortgage. If the full amount that you could borrow is more than this, then you should not be looking to borrow the full sum.

herbiesjp

YOu can get higher multiples or affordability calculations with high street lenders.

As ever it is the case of just becuase you can get amount amount agreed does not mean that it is the right course of action for you to follow.

Savingthepennies - unfortuntely I do not think the price range you are looking at feasible for you at the moment

-1- you can get around £155k but all depends on deposit, debts etc. You can get these amounts from high street lenders

MortgageMamma

Hi Saving the pennies

You are going to struggle to buy a property for what you are able to borrow so I would suggest looking at shared ownership or the open market homebuy scheme - this may make things a bit mroe affordable to you. Have a read of this link http://www.communities.gov.uk/index.asp?id=1162819 and come back with any questions.

-1-

herbiesjp wrote:

YOu can get higher multiples or affordability calculations with high street lenders.

As ever it is the case of just becuase you can get amount amount agreed does not mean that it is the right course of action for you to follow.

Savingthepennies - unfortuntely I do not think the price range you are looking at feasible for you at the moment

-1- you can get around £155k but all depends on deposit, debts etc. You can get these amounts from high street lenders

Thanks for the info.

We do have cc's, loan and a hp car, but they will be all paid off by Apr 2008.

Conrad

millsy1980 wrote:

Subject to there being no outgoings, with the examples above -1- could get around £159,793 Full Status, and if you self certed with the overtime £175,250.

Millsy Im sure you read the mortgage trade press and FSA guidance, in which case you will be aware that affordability is a key issue now. The FSA are about to take action against several firms for not taking proper account of clients affordability.

As more and more people default on thier mortgage payments the misselling cries will grow louder.

Be aware that reliance on a lenders affordability calculator is no defence whatsoever.

In the end you must be able to clearly and methodically demonstrate YOU assesed the clients affordability APPROPRIATELY. Thats waht 'Treating Customers Fairly' is all about.

It is reasonable to conclude this client would struggle to pay more than 1/3 rd of thier take home pay on mortgage, so in terms of affordability a mortgage commitment of c £310 pcm is REASONABLE.
That of course is massively less than the affordability calculator you use suggests.

The £175000 you state 'you could get' would of course be completly inappropriate and indeed reckless.

Im sure you are well aware of all this, just thought Id give the complicance angle.