If I can afford rent how come I can't afford mortgage?

extrastrongbint

Hi there!

I'm a newbie so please be kind....I currently find myself in an incredibly frustrating position and wondered if anyone had any ideas?

In about three months time I am intending to get myself on the property ladder. My problem is that although I am able to afford rent of £500 per month currently and a credit card of minimum payment of £100 per month (which incidentally will be entirely paid off before I purchase a house) I am still unable to get a mortgage because I have a low salary and am on my own.

I earn £18,000 per year and even the highest income multipliers don't cut the mustard. I am obviously not looking at buying a mansion but where I live even a flat costs £120,000.... obviously I know I can afford repayments of £600 per month and can prove it with my current situation but I can't find a mortgage lender that would even look at it.

Does anyone know of any mortgage company that actually looks at how much you can afford!;)

MortgageMamma

There are a lot of affordability based lenders but they assess using a formula rather than looking at your individual circumstances - you won't get much higher than 5.5-6 times your income and if you do the rate will be sufficiently high as to cripple you

4.9 is as high as you should really be looking at, anything more will have a very restrictive impact on your lifestyle, although one way round this would be to try and buy something two bedroomed and get a lodger in

herbiesjp

What kind of a deposit do you have to put down?

extrastrongbint

I have no deposit currently but may have a couple of grand by then (reclaiming bank charges!)

herbiesjp

Are you a graduate?

What is your occupation /job title?

Do you have a good credit history?

extrastrongbint

I am not a graduate but am training to be a financial adviser (taking my FP exams this year) (I know....the irony!)

extrastrongbint

Ooh sorry forgot the bit about credit history - mostly good - had few late payments on credit card a year ago

ajaxgeezer

Well those late payments will be on your file for 6 years. Add that to no deposit (your 'potential' two grand would pay your fees and not a lot else, maybe not even stamp duty if applicable) and a high salary multiple at a time of medium-term uncertainness..... I think I'd be keeping my cash in my pocket if I were a lender.

susy_2

Could you not get a self-certified mortgage? Surely as a trainee financial advisor you are aware of them?

, I would have thought that you would be aware of all the possible options with your background? More so than any of us?

Mr_helpful

susy wrote: »

Could you not get a self-certified mortgage? Surely as a trainee financial advisor you are aware of them?

, I would have thought that you would be aware of all the possible options with your background? More so than any of us?

I cant see the advantage of self cert un less you mean tell lies. Unfortunately OP has no deposit and slightly dicky credit.
I dont think Financial Adviser is really the right career choice just yet. A few years time may be.

extrastrongbint

susy wrote: »

Could you not get a self-certified mortgage? Surely as a trainee financial advisor you are aware of them?

, I would have thought that you would be aware of all the possible options with your background? More so than any of us?

Yes I am aware of them but you have to put down a 10% deposit and as above you can see I don't have one