95% mortgages

midget_1907

Hi all,

My partner and I are currently renting - this ends shortly and we are wondering whether we have a chance on a 95% mortgage or if we need to continue and rent to save some more.

Our details - I earn £34,400 and my partner earns £25,000

He has a good credit report all green (no debts)
I have one issue on mine and that is a loan from 2009 ( I got made redundant at the time) and in May i rung my bank to inform them - they told me I could pay half the monthly amount in May 09 but catch it all up in June 09 - i didn't realise at the time this would impact on my credit rating (stupid I know!) Other than that I have no debt.

We have currently got 14K saved and most likely looking at properties around 210 - 220K.

If anyone can help - thanks!

Thrugelmir

You still owe a debt from 2009?

midget_1907

Oh sorry. Didn't make myself clear that loan was paid as normal until it finished 2011. I meant I haven't had any loans etc apart from that one.

Thrugelmir

Personally I think you stretching yourselves. Would you be happy repaying a £200k mortgage if interest rates were 6% or 7% even 8%. Do be lulled into a false sense of security.

A mortgage is a long term commitment. So saving a larger deposit is a sensible thing to do. Particularly if you put your minds to it for say 6 months by cutting back to the bare minimum.

midget_1907

Thanks for the advice. Guess its back to saving we go!

amnblog

This deal could be placed via a broker through a specialist lender depending on other factors.

You will probably have to be a little less ambitious with the purchase price.

midget_1907

Really? Thanks. Maybe we will arrange to see the broker and just see what he says. In terms of being realistic on purchase price? Is it because we should aim for 10% deposit or because of our income multiples. I was told by someone that as a joint application you very rarely get above 2.5 times your income.

If that's the case I think we will struggle for a while as 210 is the price of a 2 bed

thanks for the advice anyway.

Gonzo33

Not necessarily true about the 2.5 joint income. I know lenders that will go to nearly 5 times joint income (not that I would recommend it).

Thrugelmir

midget_1907 wrote: »

If that's the case I think we will struggle for a while as 210 is the price of a 2 bed

Draw up a budget , see what the figures come out like on your expenditure. If you can afford a £200k mortgage then saving for a few months should be easy if you put your minds to it.

midget_1907

Thanks all.

I think at current interest rates we could afford 200k as its looking to be 1150 at 6% but I guess we worry if interest rates rise drastically. The calculator suggested that at 12% the mortgage would be 2038 and I know we couldn't afford that

At the moment we pay rent 950 and save about a 1000 a month so I suppose another 6 months and we will be nearly at 10%

everything is just so confusing think will see what the mortgage broker says otherwise we will continue for another 6 months or so and see then.

Thanks all for the advice though it has given us something to plan and work towards.

FifaFan14

I would save the biggest deposit you can before taking the plunge