What are my mortgage options?

vanilla8

Me and my fiance are looking to buy a house together. I currently earn 29,000, while he earns 20,400, so combined earnings of 49,000.

I have a student loan, and also an outstanding loan of £3879 which has 17 months remaining at £228 per month.
I have one credit card which has no outstanding balance on it.

My fiance has an outstanding loan of £6064, which has two years remaining of £284 per month.
He has one credit card, which has a balance of £300 at the moment.

We have saved up £8000 so far for a deposit.

We have no idea which mortgage would be ideal for us, or what mortgage we would be able to get.

Can someone advise us?

inmypocketnottheirs

First of all I would advise you use the savings to pay off the loans, thus freeing up disposable income to repay the mortgage.

Best look for a broker to advise, ideally one that is fee free and whole of market.

As a rule of thumb, with regards to how much you can borrow, expect three times your joint salary, so just shy of £150,000.

HTH

herbiesjp

What kind of price range were you looking at?

vanilla8

Well houses in the area of essex i am looking at are anything up to 230,000

herbiesjp

In reality you can get higher income multiples 4 or even 5 times your income.

However what you have to take into account is the effect of your loans on your income

The loan of £228 pm will mean reducing your income to £26,264 (£228*12= £2736)

The loan of £284 pm will mean reducing your income to £16,992 (£284*12 = £3408)

If you are paying the student loan, there may be deduction needed for that also

SO your new joint income is £43256

A 4 times multiple means a mortgage or around £173k. Using a 5 times income multiple means that you can look at £216k mortgage potentially - subject to a full credit score by the lender

Your deposit may limit the range of mortgages available to you, so I would suggest going to an adviser for help with your scenario

HTH

vanilla8

Thanks for the advice, much appreciated