How do I know exactly how much I can borrow?

AubreyMac

I have a low budget (I'm a FTB) as my salary is not great and I live/work in London.

But I am very ready to buy now.

When I called up London and Country (based on the MSE booklet), they gave me a rough estimate of between 170-190k.

From my understanding of what the lady on the phone was saying, what I can borrow would vary depending on if I was buying a new build or not and other stuff she was asking me that I can't remember.

However, in my hunt it isn't good enough to tell me that I can have between 170-190 coz if I start looking for 190 properties, like it and get an offer accepted, I could then find out I can only have 170 afterall.

Should I just make an appointment with a bank to get a more precise figure?

Thrugelmir

Turn the question around. What can you afford? Have you prepared a full personal budget?

Nothing clever in borrowing more than you need to.

AubreyMac

Thrugelmir wrote: »

Turn the question around. What can you afford? Have you prepared a full personal budget?

Nothing clever in borrowing more than you need to.

I think total monthly outgoing (mortgage, bills, travel, cost of living, running a car and a meal out once a week and extra for any insurace, pension contrbutions and union fees etc) of 1k would enable me to live comfortable. The quote I was given was stretched across 35 years.

pjread

AubreyMac wrote: »

I think total monthly outgoing (mortgage, bills, travel, cost of living, running a car and a meal out once a week and extra for any insurace, pension contrbutions and union fees etc) of 1k would enable me to live comfortable. The quote I was given was stretched across 35 years.

1k for all that including travel in or near London doesn't sound overly practical tbh. If you ever ended out at say 7% then even interest only on 150k might be unsustainable by the sounds? are you going to be 90ltv or do you have a big deposit?

most lenders have an online calculator that should indicate a rough maximum they would lend you.

amnblog

Hi Aubrey

I think you need to consider affordable housing options if you want to keep your outgoings down.

The person you spoke to at LandC was giving you a ball park guide.

In order to accurately decide what works for you a broker will need to know what type of purchase you intend (standard, help yo buy, shared ownership etc).

Approach a broker that specialises in affordable housing

Try this organisation as a start point

Www.mho.co.uk

Fruit_and_Nut_Case

islam96 wrote: »

Good topic deserves Rating

Bad post deserves :spam: button.

spidereyes

AubreyMac wrote: »

I think total monthly outgoing (mortgage, bills, travel, cost of living, running a car and a meal out once a week and extra for any insurace, pension contrbutions and union fees etc) of 1k would enable me to live comfortable. The quote I was given was stretched across 35 years.

To be honest that doesnt sound very realistic, 1k a month for ALL outgoings including mortgage, near london?

Borrowing £170,000 @ 4% over 35 years = £753 a month
Borrowing £190,000 @ 4% over 35 years = £841 a month

I would have thought even lowest band council tax near london would be around £100 per month.

Check individual bank websites for online calculators as to see how much you can borrow, but be realistic, if 1k a month is all you can afford for everything then properly work out if thats realistic, bearing in mind I live in a reatively cheap area of south wales, mortgage £115,000 over 35 years and mortgage repayments plus all bills, food, travel = over £1000 per month

AubreyMac

Sorry I now realise I didn't make myself more clear on the figures.

The figures given on 170-190 was for the price of the actual property in total (hypothetically).

I have a 80k deposit so based on the above figures, it seems I could borrow 90-110k.

AubreyMac

amnblog wrote: »

Hi Aubrey

I think you need to consider affordable housing options if you want to keep your outgoings down.

The person you spoke to at LandC was giving you a ball park guide.

In order to accurately decide what works for you a broker will need to know what type of purchase you intend (standard, help yo buy, shared ownership etc).

Approach a broker that specialises in affordable housing

Try this organisation as a start point

Www.mho.co.uk

Thank you.

I have a large deposit so probably won't qualify for the help to buy.

Problem with shared ownership is that the earning criteria seems quite high and the available flats itself seems more luxurious and over priced than necessary.

Even the cheapest shared ownership I've seen in the outskirts of london still requires a salary of 30k which I will not be earning until about 5 years time, assuming I remain in my current job.