First time buyer advice

Rdbcfc14

Good afternoon

I'm a first time buyer looking to get on the property ladder, just after some friendly advice.

I'm 21 years of age, currently in full time employment. My salary is £13,500 with bonuses of £6-7000 per annum. I have a £21,000 deposit available. I have a car loan with 0% finance of £206 per month. I have checked my credit score online which is over 900, i am also on the electoral roll. It will be a sole mortgage. I already have an agreement in principle with one bank.

There is a house on the market for £115,000 that I'm very interested in. The estate agent involved is offering free legal costs if I go with their conveyancing, which I think is an attractive offer.

So my questions are

- Am I aiming too high to be able to get the maximum of £94,000 loan?
- Is the car loan a risk?
- Is the estate agents offer of free conveyancing handy or is it just a marketing tool?
- Could my wages be too low?

I apologise if they seem like silly questions but I am at the very bottom of the whole mortgage topic. Any advice would be greatly appreciated. Thankyou

japmis

I'd recommend you speak with a mortgage adviser, but given you already have a mortgage in principle then surely you told them all your credentials?

Rdbcfc14

I went through a mortgage broker, who checked my wage slips etc. he works closely with a bank then got me the mortgage DIP. Just seeing if there's anything that could go wrong?

kingstreet

I've just run those details through the Halifax and Nationwde affordability calculators and the outputs were £52,070 and £42,200 respectively for a 25 year term.

I would check you actually have an agreement in principle from a lender, not just a broker's idea.

Typically, you'll get about four times your gross basic plus 60% of your bonus, less the £2,472 credit commitment. I used 13,500 + 4,200 for income and took off £2,472.

Be careful, as your affordability for a bigger mortgage looks suspect.

Thrugelmir

Rdbcfc14 wrote: »

Just seeing if there's anything that could go wrong?

You'll be financially stretched. More so if bonus doesn't materialise. There's more to home ownership than just paying the mortgage.

Car finance is never 0%. You paid full price. Discount would have been given for cash.

Rdbcfc14

The bonus is guaranteed. My salary is also due to go up by 8% soon. The deal in principle that I got from the broker has the banks logo etc at the top so I'm assuming it came from them directly, as I say he is close to that particular bank.

kingstreet

If I give you a basic of £20,500, Nationwide's output rises to £62,800. This is the lender with some of the best rates in the market, Halifax less so, although they would perhaps offer more, £71,000.

I'm not saying you won't get a mortgage, I'm saying you may find the payments uncomfortable.

Go into this with your eyes open, after analysing your future expenditure carefully. Once you complete and the broker has been paid, you're on your own. Being able to do something, doesn't always make doing it sensible...

Good luck.

shortchanged_2

Where did the £21,000 come from? Did you save this up yourself?

Rdbcfc14

Okay, thank you for the advice.
Some added info is that I plan on renting a room out and I've been advised to take out a 40 year plan to make the monthly payment cheaper.

I've done a mortgage calculator and worked out that with all the bills with the mortgage around £350 including council tax, utilities etc paid, I'll still have around £300-400 to save. I think that's enough to survive on.

Rdbcfc14

The £21,000 comes from my savings yes. It's compensation I received due to a situation in my childhood.

kingstreet

How much of it is compensation?

How much of it did you save from your income and over what period?