FTB: Is this affordable?

waitingforalotterywin

Hi

Im looking to buy my first house. I can quite happily afford a 120k house with 20k deposit.

I earn 33k a year with guaranteed overtime/bonuses, although the past 2 years earnt 45k but i cant gurantee this.

My partner is at university (nursing) and has 2 and a bit years remaining.

Ive been looking at the first homebuy schem where you can get an interest frree loan on 25% of the property value for 5 years. With this I could get a 155k home with the same deposit and LTV on thr remaining 75%.

Is it wise to put this 25% onto the mortgage after the 5 years? The payments will be affordable as there will be two sources of income but will a lender allow someone with a low anount of equity to add so much onto the mortgage?

Dont want to do it and end up with a 30k loan AND interest payable if i cant!

pauletruth

not knowing were you are can you not get an house with your 120k. why push it. bear in mind intrest rates are going to go up and it will hurt. you have a 15% deposit on a 120k but you would only have just over a 10% on a 150k. you then need to ad the other costs in which could easily hit you deposit.

waitingforalotterywin

pauletruth wrote: »

not knowing were you are can you not get an house with your 120k. why push it. bear in mind intrest rates are going to go up and it will hurt. you have a 15% deposit on a 120k but you would only have just over a 10% on a 150k. you then need to ad the other costs in which could easily hit you deposit.

Got5k prepared for other costs involved. Plenty of properties available but prices are predicted to rise arent they and interest set to stay low for 2 years?

Henry_P_Chester

waitingforalotterywin wrote: »

Got5k prepared for other costs involved. Plenty of properties available but prices are predicted to rise arent they and interest set to stay low for 2 years?

Predicted to rise by who?

In 2007 house prices were predicted to have risen by as much as 40% by now and they have fallen by around 20% or nearly 50% for NI.

Your probably right about interest rates but what about after 2 years? Fixed deals don't last forever.

pauletruth

just because you can get a loan for a lot more really does not mean you should. imagine intrests rates at 10% and the house price 20% less than you paid is it still a good idea. say a loan of 130k ant say 2% its £554 now at 5% its £768 and at 10% its 1193. for a repayment morgage. you will be surprised how fast the morgage rates can move. we are just lucky that they hae stuck at a very low level for so long.

shahgee

One should be within it means all the time. If you think you can afford it now then are you sure you can afford it lets say 2 years time.