FTB: Am I Asking too much?

TedJ

Hello all,

I'm 24, a first time buyer with the mind to buy a property around the 117k - 125k mark ASAP. I'm an IT graduate working as developer and have been in my job for over 2 years. I earn 28k and I'll be applying for the mortgage solo although I will have a lodger who'll be paying 350-400 a month for their room.

Sounds ok, right? Well I have no deposit to speak of and I'm 15k in debt, but that is very much under control. My monthly payments equate to about £400. I think I would like to clear these in the mortgage if possible. Credit history is ok, not totally perfect but good AFAIK.

Means I would need to borrow 132k-140k to include these debts, which is about 113%. I want to speak to a mortgage adviser, but to be honest, I want to make sure I'm not wasting their/my time before I go and do that.

Can anyone tell me if what I'm asking for is realistic or should I get back to saving?

As a secondary backup option, my parents will guarantor if need be. I'd prefer to avoid this if possible. Although my debt is easily manageable for me since my new salary (I'm considerably overpaying my loans each month), I'm still embarrassed about running up 15k while I was a student. How much information about my mortgage deal is disclosed to them as guarantors?

Many thanks

Ted

herbiesjp

The debst will mean you have to reduce your income by £4800, and the apply say 5 times your income which is what some lenders may give you as you are a graduate, some lenders may go that high anyway.

So you are very close to the figures you are looking for on a 100% mortgage basis. Can you parents help with a small deposit?

Whilst adding the debts to the mortgage may be increasig your monthly affordability from day1, you need to be aware of the consequences of turning this unsecured debt into secured debt against your property. Youare also in negative equity from day 1 also

Have a word with a fee free whole of market adviser after reading the mortgage guide, and have a discussion to what what route would be best for you

TedJ

Many thanks for the reply, herbiesjb.

I hadn't really considered running a mortgage and my debts side by side, but I guess that would be a better option. Would lenders look more favourably to me if I saved a deposit rather than clearing my debt?

Asking parents for a deposit is out of the question sadly, though as I said they have agreed to guarantor. This option is looking more appealing but as I said in my OP, I don't know much about it and I'm still embarrassed about running up 15k while I was a student. How much will my parents know about my mortgage deal if we go down this route... is it just a case of they guarantor their portion of the mortgage and I deal with the rest? (obviously paying it all).

I realise a 5x mortgage at 110%+ is unlikely so any advice on the best way forward from here would be appreciated.

Thanks,

Ted

Robert_Sterling

Nearly all students will start life with debts.
So nothing to be embarassed about there if it is a Student Loan Debt.
If credit card or bank loans etc are involved that is another matter.

In respect of your parents acting as guarantors they should not take on this role unless they know exactly what the risk involved is. Their house would be at risk. You should be 100% frank and truthful about telling them the full details of all your debts.

TedJ

Robert_Sterling wrote:

Nearly all students will start life with debts.
So nothing to be embarassed about there if it is a Student Loan Debt.
If credit card or bank loans etc are involved that is another matter.

In respect of your parents acting as guarantors they should not take on this role unless they know exactly what the risk involved is. Their house would be at risk. You should be 100% frank and truthful about telling them the full details of all your debts.

You are of course correct, I just don't want them to feel pressured into helping me out Back to the drawing board for now I think.

My debt isn't a student loan. I do have one but I know that most lenders disregard it. Would clearing my loans be a better option than raising a deposit?

Thanks,

Ted

UK007BullDog

Yes, better to clear any loans and CC's, once that is done start saving for a deposit or for the associated costs getting a mortgage.

CC's cleared then cancel, to strengthen borrowing power.