Low Income Mortgages

Swweex

Hi all,

I'm looking for a mortgage as a first time buyer, I have a deposit of 25k but am only on a salary of 16k. To get a decent house in my area I am looking to spend around 130k. So the problem is I need a morgage of £105,000! I have phoned a couple of banks and the most they are willing to lend is about £75,000. Has anyone else had this problem? Would a mortgage broker be able to get me any better deals?

Thanks for any help

ACG

No, banks do have different ways of working out how much they will lend you but none will lend you the amount your after.

£75,000 is quite a lot to be honest. You need to look at this from a risk perspective not as it currently is with the lowest interest rates possibly ever. Rates are only going way and thats up.

Gentoo365

With living costs likely to increase and mortgage rates likely to do the same (in the medium term) it is unlikely you will be able to afford a mortgage on that salary. Not on your own.

What are the actual selling prices in the area? Check using rightmove or zoopla:

http://www.rightmove.co.uk/house-prices.html
http://www.zoopla.co.uk/house-prices/

It may be that you are looking at offer prices and you can negotiate. Combined with some help with the deposit you may be able to get somewhere.

However personally I would try to either save more, or see if it is possible to get a higher paid job.

...or maybe just wait. Sorry, probably not what you wanted to hear.

jason1231972

Swweex wrote: »

Hi all,

I'm looking for a mortgage as a first time buyer, I have a deposit of 25k but am only on a salary of 16k. To get a decent house in my area I am looking to spend around 130k. So the problem is I need a morgage of £105,000! I have phoned a couple of banks and the most they are willing to lend is about £75,000. Has anyone else had this problem? Would a mortgage broker be able to get me any better deals?

Thanks for any help

Your problem is that you're looking to borrow over 6.5 times your salary, which is not do-able at present. I know little about mortgages, but your 4.7 x salary (£75,000) also seems quite generous.

You can get mortgages on a low income, I'm in the same boat. I've had an agreement in principle and a number of favourable 'chats' with lenders. But common sense dictates that just as with any other credit product, you need to be able to afford the repayments, hence why the amount you're being offered is being kept 'low'.

Swweex

Thank you for the advice everyone, it doesn't matter if it isn't what I want to hear, at the end of the day I have to do what is sensible and at the moment that doesn't seem to be getting a mortgage! I'm an accountant and studying towards my next qualification, so after that I should be on a fairly decent wage. I should hopefully pass in the next couple of years so that gives me time to save more for a deposit aswell. Thanks everyone

maninthestreet

Waiting (and saving ) for the next 2 years is the best move. Who knows what might happen to rates as a result of the Eurozone debt crisis.

Thrugelmir

Swweex wrote: »

Thank you for the advice everyone, it doesn't matter if it isn't what I want to hear, at the end of the day I have to do what is sensible and at the moment that doesn't seem to be getting a mortgage! I'm an accountant and studying towards my next qualification, so after that I should be on a fairly decent wage. I should hopefully pass in the next couple of years so that gives me time to save more for a deposit aswell. Thanks everyone

You have a decent foundations for the deposit on a property. Utilise your ISA allowances well and consider fixed term products to obtain a better interest rate.