new to mortgages can you answer a couple of ?`s Please

jamieuk23

Hi at the moment me and my partner are living a flat which was given to be recently by my parents to get us on are feet with eventually getting a house hopefully in about 8 months time with a baby on the way

I haven't been working for a while but am about to start a new job any week now.

My flat is worth £120,000 and no doubt we will buy a house for about £1700,00 - £1900,00

So we need to get a mortgage for about £60,000


Now I have a few ?`s.

1. I take it most banks etc ask for about 6 months worth of pay slips is this tue ?

2. Is it best to go with a broker ?. will they be able to find me the best rate or is it best to find my mortgage my self ?

3. Is there a well known company out there that seem to offer the best rates ??

thanks for any help !! its most appreciated !!

herbiesjp

In answer to your questions:

1) No - some may want 3, some may only want the last payslip. As you are about to start a new job, they may want to know about any probationary period, as some lenders will not like the fact yo uare on probationary, whislt others will be fine

2) I'm biased, but I think a broker would help you enormously. The fact you are asking these questions means that you need help. If you were to go it alone and make the wrong choice, it could be an expensive mistake.

3) All lenders offer good rates. What rate is good for you, will depend on your own indicidual circumstances. Again that is where a broker will be able to help you find the right deal

HTH

robertbruce

Hi
First point appears to be that you are thinking of borrowing £60k with no definite means to repay it, so securing an income is the most important part.

Borrowing is easy, repaying is more difficult. In your case, if you feel that the job part starts off OK and you want to make the commitment to the new loan, then a self certificated loan of up to 80% of value would almost always be available to you with the kind of deposit you are talking about. (Self cert requires no payslips, but an accountant would need to indicate that you appear to be able to afford the loan repayments you are taking on)

So, realistically, you could borrow up to £144k on a £180k property, but could you repay the £1200 a month or so on that size of loan at the rates applied on self-cert loans. Possibly a risk until the job situation settles down.

So, alternative view might be to use £100k of sale of flat (£120k sale price) and borrow £80k for the new house, leaving you a £20k buffer for a rainy day if the job situation went against you unexpectedly. (It would also be earning some interest while its sitting there UNTOUCHED)

OR you can simply use the £120k sale price as a deposit and borrow £60k for about £500 per month, all depending on length of time the loan is over, but the job would need to be fairly secure.

Obviously, I can only see a limited picture of your circumstances but I hope that by highlighting a couple of areas of concern AND optimism, the professional financial advice you MUST get will mean a bit more to you personally.