Mortgage options

Autumnrust

Hi all,

I am brand new to the site, so please go easy on my (what may seem obvious) questions.

In a nut shell, I want to buy a house, I want to buy one badly and we are in a situation that requires us to try and speed up the process so I am trying to think of ways around saving a large deposit.

A bit about me and my family, I am 26 im in sales and I earn on average £70k a year (average because of commisions vary), my wife is coming to the end of her maternity pay £500 PCM at the end of which she will not be going back to work, and as you may have guessed we have a 6 month baby.

Me and my wife have dotted about in rented accomodation for the past 4 years becoming increasingly unsettled as we know the end goal is to buy a house, but realistically we were some way off. We are now in a position that the house we are renting is not baby friendly and we need to move in the next 6 months but we dont want to move to rented accomodation again as we wont be able to settle - its a bit of a catch 22.

So, I want a buy a house, and I want to buy one efficiently and effectively, so these are the 3 options I have devised -

> 100% Mortgage - So these are back, but with a twist, 25% of the value of the house you wish to buy is offset against a parent of grandparents home. In the event you lose the house it would be recovered out of their mortgage. Lots of loop holes and at 6.48% it costs

> Save to buy scheme Nationwide - We have been saving consecutively into this for 6 months and have £2,200 in it. This will offer us the option to apply for a 95% Mortgage

> Loan the value of a deposit WITH A DIFFERENCE - I know the implications of taking out a loan for a deposit on a house when you are the one taking the loan. But my wife and I have discussed the option of my wife taking a loan and me applying for the mortgage, completely segregating the 2. This way this wont effect out borrowing power. Any one have any experience of this?

In summary we are looking at houses ranging from £160 - £170k, on a salary of £70k and a £2.2k deposit (so far).

I know that for those who have a saved a long time, people who are after a quick fix may seem tedious, but I have genuine reasons and could really do with some seasoned advice.

Thanks for taking the time to read this, look forward to recieving your comments.

kingstreet

What's your basic/commission split and how long can you evidence the level of income you are claiming?

Thrugelmir

Autumnrust wrote: »

> Save to buy scheme Nationwide - We have been saving consecutively into this for 6 months and have £2,200 in it. This will offer us the option to apply for a 95% Mortgage

You haven't even saved the purchase fees yet.

Suggest you look at where you are spending your money. As your first objective should be to save hard for a minimum of 6 months and at least.

DannyboyMidlands

If you want to buy efficiently then a high LTV is not the way to go. You will get shafted on the interest rate.

Considering that you earn £70k, why not just save up a decent deposit?

somethingcorporate

You'll not get a mortgage without a deposit. You make reasonable money so saving one shouldn't be a problem. If you cannot afford to save for a deposit then you cannot afford to own a home.

SouthCoast

Post a SOA on the Debt Free Wannabee board for advice on reducing your expenditure.

Autumnrust

kingstreet wrote: »

What's your basic/commission split and how long can you evidence the level of income you are claiming?

Hi Kingstreet, I can prove this for the past 2 years, I have wage slips etc. My basic is £48k and my comms £22k.

I appreciate everyone elses comments on saving, but I pay alot of rent and am the only earner in our house. We are 100% re evaluating our expenditure which will hopefully put us in a better position.

Does anyone have any comments on 100% mortgage or my wife taking a loan? I would be intrested on your feedback/experience.

Gary123456790

Hi,

I doubt it is likely you will get a 100% mortgage in the current climate. To get a definitive answer talk to a couple of lenders. It is likely that most will want around a 20% deposit.

To borrow £165k for 25 years at 5% interest will cost you around £960 a month (taken from the HSBC repayment calculator). How does this compare to what you are paying for rent at the moment?

I think the summary of responses so far is that on 70k you should be able to save quite a bit each month, even with a baby!

Thanks,

Gary.

Thrugelmir

Autumnrust wrote: »

Does anyone have any comments on 100% mortgage or my wife taking a loan?

100% mortgage advances are no longer available.

Consider renting somewhere cheaper for a while. Particularly if it means you can save more.

On your salary alone you take home around £4k a month. So if you really want to buy a home there's no reason why you shouldn't.

Autumnrust

Hi Guys,

This is the 100% Mortgage I was talking about - 100mortgagesonline.co.uk
I spoke to Connells and they are currently offering this.

kingstreet

Autumnrust wrote: »

Hi Kingstreet, I can prove this for the past 2 years, I have wage slips etc. My basic is £48k and my comms £22k.

I appreciate everyone elses comments on saving, but I pay alot of rent and am the only earner in our house. We are 100% re evaluating our expenditure which will hopefully put us in a better position.

Does anyone have any comments on 100% mortgage or my wife taking a loan? I would be intrested on your feedback/experience.

With a two year history you will probably get 50% of your commission taken into account as an absolute maximum. Many lenders will ignore it altogether, unless it will be guaranteed by your employer.

Tipton & Coseley has a family assistance plan where a charge is taken over a relative's home and Marsden has a plan where a relative puts a sum in a savings account with them and a charge is taken over that for additional security.

I don't like the loan idea personally. Regardless of the name it's going to be in, it has to be paid every month, just at the time you're taking on a mortgage commitment and have the expense of a child to take into consideration. The mortgage rate is still going to be fairly high for a 90% mortgage (£144k over 25yrs at 5% = £841) and that assumes you'll get a loan of around £15k (£15k over 7 yrs at 11.9%APR = £259.) That's a total cost of £1,100 then you have to insure yourselves, the property and try to plan for maintenance costs on top.

How would you cope with a reduction in your commission earnings while having to maintain these payments?