The gulf of 'affordability'

Davewils

brit1234 wrote: »

Davewils from your previous threads you seem to be heavily linked to credit cards and credit issues. If you are really considering first buy with an interest only mortgage I have to ask is home ownership really for you.

You cant get the right salary multiple and you are reliant on low interest rates. You do realise that libor is going up and likely to be a record high when the euro goes t,tts up. That would put you in deep trouble.

My credit card debt is down to £2500, and slowly decreasing.

WHat on earth is libor ?

casualwalks

Davewils wrote: »

Who on earth can buy a 1-2 bedroom place in Bristol for 80k?!

Possible but it would have to be a flat-

http://www.rightmove.co.uk/property-for-sale/property-27959566.html

http://www.rightmove.co.uk/property-for-sale/property-35079320.html

http://www.rightmove.co.uk/property-for-sale/property-18161040.html

http://www.rightmove.co.uk/property-for-sale/property-29199901.html

brit1234

Davewils wrote: »

My credit card debt is down to £2500, and slowly decreasing.

WHat on earth is libor ?

Banks havevlittlemoney in people's savings at the moment and have been reliant on borrowing money themselves to relend out in mortgages. The cost of this lending is not based on the normal interest rates but libor rate. This has been creeping up in recent months and as so mortgage rates have been rising.

Davewils

Property 1 + 3: Preferably somewhere that isnt going to be burgled every 5 minutes and wasnt once a crack den.
Property 4: Not really in Bristol! Would cost me a fortune in petrol to get to work up near 'sadly broke'!

Property 2 is the only one which is in a reasonable area and would be an ok commute. But that one is already under offer.

casualwalks

I live around the corner from Property 3, IMO Easton is a lovely area, but each to their own.

LondonMoneySpendingExpert

Davewil, Whats your current net salary?Also at present how much is your rent including council tax?

Davewils

Current salary is 20k, going to be 22k in March, net is about £1300 pm. My current rent is £575, council tax is £80.

jc808

With a salary like that i think 80k is your max borrowable

it looks like its a crack den or a long travel imo, the latter isnt the end of the world

LondonMoneySpendingExpert

How much are the First Buy housing in your area?

From what I read, and quote me if I am wrong, but if the property is £160k and 20% came from the builders you would own £128k.
Therefore if you got a deposit of 10% you would need a mortgage of £115.5k, but based on your salary I think you'll find that tough to find. Also I think most first buy schemes expect you to have a repayment mortgage not interest only.

If some how you were about to get a mortgage a repayment mortgage on 2 years fixed rate would be approx £724 (90% LTV), also I'm sure the propery would be a lease hold so will have a service charge between £100 to £150 pounds. Therefore at the end of the month you would only have £476.
If you then take off Council Tax (£80), Phone internet (£15), TV Licence (£12), Energy (£80), Mobile (£25), Contents Insurance (£20), Life Insurance & Income protection (£40) you'll have be left with £204 for food and going out. Also you need to think about credit card, car insurance, petrol etc

Davewils

With FirstBuy you own 100% of the property so with a 5% deposit you'd be looking for a 75% LTV.

I think i can get this down to 70% or maybe even (with help!) 65% LTV.