Simple Mortgage Question

noakesc

Hi Everyone,

Simple question for you all. I am looking to get a mortgage quite soon and would like to ask you all for a bit of advice on what I can get. The basic information is:

Income 1: £17,000
Income 2: £17,000
Deposit: £45,000

What sort of multiple of the joint salary can we expect to borrow? Is 4-5x achievable? For example, could we afford a property of £205,000 in value?

I appreciate all the help.

Thanks,
Charles

Thrugelmir

On joint salary of £34k you won't be offered a £160k mortgage.

A £125k mortgage would take around 30% of your take home pay as a guide.

noakesc

Hi, thanks for the response. I am not too sure by what your saying though. Can you please elaborate. 30% of my take home pay?????

Thrugelmir

noakesc wrote: »

Hi, thanks for the response. I am not too sure by what your saying though. Can you please elaborate. 30% of my take home pay?????

On your salaries your take home pay is around £2300 a month.

A £125k mortgage would cost around a 1/3 of that. Say £750.

noakesc

Ok I get that now. What is the most % of take home pay I can expect? I know the higher the percentage the more difficult everything will be, but I just want to know.

I appreciate all your help.

Thrugelmir

Most mortgage lenders have affordability calculators online on their websites. . These are only a guide. More often or not you will be offered a lower figure.

Ideally draw yourselves up a budget. As expenditure quickly mounts. Understandably you wish to borrow a much as you can.

noakesc

Thanks for the help. I think if we could get 40% of our take home pay as a mortgage, I would be happy. Although it is a lot, I am very confident that we could afford this.

Thrugelmir

noakesc wrote: »

Thanks for the help. I think if we could get 40% of our take home pay as a mortgage, I would be happy. Although it is a lot, I am very confident that we could afford this.

There's more to life than working to pay a mortgage. So worth keeping a balance.

ACG

You would be looking at around £140-160k mortgage plus your deposit on top. I tend to work to around 4 - 4.5 times your income.

So max would be around £200k property, however i would say maybe look at a maximum of £170-180k to avoid bidding and not getting your mortgage. That is also presuming youhave no loans, credit cards, HP etc and a good credit rating.

getmore4less

whats your earning potential?

Are you likely to see pay rises over the next few years. you could look at a longer term with a few to overpying with any rises(over inflation)

If you stick sample number in a simple calclator you can get an idea of mortgage costs

I use http://www.whatsthecost.com/mortgage.aspx

£140k at 5%

25y £819
30y £750

You need to decide what you will be comfortable with then play with the numbers, think about interest rates, loss of income, costs of ownership

DannyboyMidlands

noakesc wrote: »

Thanks for the help. I think if we could get 40% of our take home pay as a mortgage, I would be happy. Although it is a lot, I am very confident that we could afford this.

40% of your joint take home pay on mortgage payments alone is suicidal. Especially as interest rates are at an all time low and this is a 25 year decision.

What happens if one of you can't work for a while?
What about enjoying life?
Do you have a contingency fund?