Getting on to the property ladder

jangor_2

My son is a fairly low wage earner, i.e. approx. £24,000 p.a. His girlfriend earns approximately £14000 p.a. I am giving them £12,000 towards the deposit to try and help. Is there any chance that they would be considered for a mortgage and if so, what amount could they hope to borrow?

:cool:

Many thanks for any pearls of wisdom!

pcwilkins

Yes, they will certainly be considered, assuming no credit history problems.

Usual amount is 2.5x joint income which makes £95k. Or 3x main salary + second salary which makes £86k. Some lenders have recently started to offer 5x income but I would personally be terrified at the idea of taking on so much debt. Also depends on value of property.

You should however make them aware that they will probably end up paying back over double what they borrow (assuming interest rates stay at present level which is unlikely) so they should try and raise as much deposit as possible.

Alternatively, rent. It's well worth considering these days.

Peter

tucbiscuit

I would say it depends on what area, me and my gf earn about £40,000 combined and are hopefully completing on a £140,000 this week. We however live in liverpool where that amount gets you a large 2 bed terraced in a good area.

jangor_2

Thankyou. Unfortunately we live in South East London/Kent border where property prices are still quite high.

Doozergirl

They will be offered a mortgage but you've said it; the chances of them finding anything to buy with the budget they will be given is nigh on impossible in your area.

King_Of_Fools

If they wait for a couple of years they will be able to get a bigger mortgage and the houses will be more affordable as the prices are now falling.

Turnbull2000

A combination of those earnings and locality would suggest they're priced out of the market.

This is not targeted at you personally jangor, but parents offering huge deposits (often through equity "release", i.e. borrowing more) just exacerbates the very problem your children are experiencing by sustaining what should be unsustainable prices.