FTB - advice needed

woolgar.c

Hello,

We are in the process of trying to buy our first home. We are waiting on receiving our credit report to check everything listed is correct.

I'd appreciate some help regarding how we determine how much we can borrow; I have used the mortgage calculators on some of the bank websites & there is quite a difference. Are these calculators quite representative of what you can actually borrow (obviously noting the fact that a full credit check will impact upon this).

We have 11k deposit & are looking at houses from 150-180k. We have no dependents & only 1 outgoing of £390/month (have another loan due to finish next year of £181/month & figured we'd settle this in full prior to applying for the mortgage). Earnings are 29k & 18k.

We may be able to have some money from family to contribute to the deposit; we're not really sure if it is worth trying to do this & how much difference it will make on monthly payments & over the long run to have a 90% LTV compared to a 95% LTV. I presume with a 90% LTV more providers are available & hence better interest rates? We were looking at a 2 year fixed rate repayment initially.

The other option is to perhaps have a higher deposit but still have the £181/month loan.

Thank you

Thrugelmir

How much do you currently owe on the loans?

Wh05apk

Thrugelmir wrote: »

How much do you currently owe on the loans?

Not sure the relevance of this?


But I would expect a mortgage of about £160-£170k could be possible dependent on other factors such as ages/children /credit history etc.


At 90% you would have a bigger choice of lenders, and lower rates.


If you kept the second loan, the maximum lending would reduce to about £145-160k

ACG

The calculators are fairl accurate yes - subject to you being accepted.

The amounts they will lend will vary.

woolgar.c

If you kept the second loan, the maximum lending would reduce to about £145-160k

This is what I thought may be the case. Thanks.

woolgar.c

ACG wrote: »

The amounts they will lend will vary.

Will this be close to the amount generated from the calculators or can it be vastly different?

ACG

It depends. The calculator will ask certain question which covers the majority of information. If your circumstances are out of the ordinary or you know of something which is not being asked then chances are it will vary.

Some lenders also display maximum lending - assuming your credit score is A1. If it is not then that may reduce down.

But that does not mean it will always be less than the figure they give. Just give yourself a buffer of a maybe £3-5k between what you need and what they say you can borrow - especially if you have a student loan or need overtime/bonuses to get what you need. Just to be on the safe side.