Older Couple but First Time Buyers

darkvader

Happy 2013 everyone,

This year we finally get serious and get our first home in the UK. Since we will be purchasing for the first time I was wondering if there is a limit on how much we can spend or borrow. We are in our early 30s and looking for a proper family home before we start a family
Our joint income is about £80k, we have a deposit of £20k ready and in a few months, with some settlement money to come in, we will have almost £40k to put down as deposit.

Having looked around, we are certain that we will purchase a property in the region of £220k to £250k and with this I have a few questions
1. If we buy a £250k property and put down £40k, we have a LTV of 84% - is this too high for a first time buyer? If so, should we look to buy a property for £200k putting down £40k bringing LTV to 80%?
2. We have no clue if FTBs need to go for lower priced properties. Is our eligibility merely on how much income we have? Paying £1200 per month when we earn close to £5k a month is very easy and does not stretch our budget. Is this how banks will also assess our eligibility?

Thanks
DV

princeofpounds

Older Couple? Early 30s?

The average first time buyer is well into their 30s these days. You aren't old.

1. You should be able to get a mortgage with a 15% deposit, but boosting that to 20% will give you some proper pricing, interest rates are still a bit steep (relative to ultra-low base rates at least) on 10% deposit mortgages.

2. No, FTBs do not need to go for low priced properties. What will matter is your deposit, your income and your credit record.

With your joint income as it stands you could borrow significantly more than you plan to. However, your deposit is probably the limiting factor at the current time should you want to spend more.

darkvader

Thanks Princeofpounds(!)

I dint quite mean it like that about being old - have read so many posts on here where people in their mid to late 20s get a decent property under £100k just to get on the ladder - so comparatively, we are late bloomers.
Appreciate clarifying my doubts, we initially aimed to buy for £200k and put down £40k which meant a 20% deposit and good rates. We now realize that moving our limit to £250k opens a lot more options to get a decent place that will be home for the next 30 odd years. Let me try and save some more to aim for 80% LTV

Cheers
DV

lb364

Don't forget if you go over £250k you will need extra cash to pay the 3% stamp duty - enjoy the house hunt