Will I ever get a mortgage?

seasideme

So at present I don't have a deposit and my wage is only £15k I am opening up an homebuyer ISA and plan to save into it for the next 5 years. At this point I hope to be earning £21k (nhs)

I'm thinking of around £10-15k deposit at this point, but it will be a single application as my partner won't be considered due to his age.

1-2 bed flats are around £120k now, it seems impossible that I'll ever be able to afford a place of my own. I'd need £50k + in a deposit.

Other than the bank of mum & dad (nothing there) or moving back to their area, it appears we will be renting forever.

zarf2007

seasideme wrote: »

So at present I don't have a deposit and my wage is only £15k I am opening up an homebuyer ISA and plan to save into it for the next 5 years. At this point I hope to be earning £21k (nhs)

I'm thinking of around £10-15k deposit at this point, but it will be a single application as my partner won't be considered due to his age.

1-2 bed flats are around £120k now, it seems impossible that I'll ever be able to afford a place of my own. I'd need £50k + in a deposit.

Other than the bank of mum & dad (nothing there) or moving back to their area, it appears we will be renting forever.

you might want to consider going for a new build and use the help to buy scheme. You only need 5% deposit and the government gives a 20% loan at 0% initially and you only need a 75% mortgage.

With a new build you can reserve to avoid being gazumped (saving on loss of legal fees) and you get the NHBC 10 year warranty so some peace of mind...

more info here:

http://www.helptobuy.org.uk/


keep your credit file clean however, it needs to be A1.

andyfromotley

seasideme wrote: »

So at present I don't have a deposit and my wage is only £15k I am opening up an homebuyer ISA and plan to save into it for the next 5 years. At this point I hope to be earning £21k (nhs)

I'm thinking of around £10-15k deposit at this point, but it will be a single application as my partner won't be considered due to his age.

1-2 bed flats are around £120k now, it seems impossible that I'll ever be able to afford a place of my own. I'd need £50k + in a deposit.

Other than the bank of mum & dad (nothing there) or moving back to their area, it appears we will be renting forever.

I would look for a new career. To work in a role for 5 years that will still leave you getting some 20% less than the average salary is not conducive to achieving your dreams.
There may be compelling reasons why you want to stay in this role. You consider it a vocation or you get huge job satisfaction which are perfectly valid, however just from a financial point of view this job will not enable you to reach your goals.

audigex

There's more to life than money, AndyFromMotley: and a career change isn't always possible.

With 1-2 bed flats being 120k, though, I can't see buying being realistic until your partner can be counted on the mortgage too. You say he can't be counted because of his age, but will this still be true in 5 years?

It sounds to me like you need a 5 year plan to save as much as you possibly can, at which point your savings plus a mortgage at 4.5x your joint income should put you in range.

4.5x your expected 21k in 5 years would be 94.5k at that stage
Plus 15k saved for your deposit would be ~110k
Plus 4.5x whatever your partners is on:

Assuming your partner is on minimum wage full time (hopefully the worst case scenario) that's around £13k you should be able to borrow 4.5x £34k, which would be around £150k, plus your £15k saved as a 10% deposit would put you at a £150k property with a £135k mortgage, or thereabouts.

Unfortunately, it's becoming harder and harder to afford a mortgage on a single salary, and I think your goal is going to have to be to get into the best possible position in 5 years time, or possibly before then depending on your partner's salary and how fast you can save ~£12k.

Alternately, perhaps it's worth looking at commuting: this has costs of it's own, but the price difference even within 15-20 miles can be extraordinary.

Red-Squirrel_2

andyfromotley wrote: »

I would look for a new career. To work in a role for 5 years that will still leave you getting some 20% less than the average salary is not conducive to achieving your dreams.
There may be compelling reasons why you want to stay in this role. You consider it a vocation or you get huge job satisfaction which are perfectly valid, however just from a financial point of view this job will not enable you to reach your goals.

I'm going to make a massive assumption that the OP is a healthcare assistance or similar and is planning to train/study to become a healthcare professional. This is exactly what I did, although in 4 years rather than 5, and even though it left me in debt it was without any doubt the best thing I ever did with my life.

OP, don't give up hope. Live cheaply and try not to accrue debt as a student (that's advice I sadly didn't take!) and once you qualify you have a skill that is in high demand and that you can use anywhere any day of the week. You can do extra shift, nights, weekends and as you start to move up through the increments then with really tight budgeting you might find that deposit money appears quicker than you thought it would!

andyfromotley

audigex wrote: »

There's more to life than money, AndyFromMotley: and a career change isn't always possible.

With 1-2 bed flats being 120k, though, I can't see buying being realistic until your partner can be counted on the mortgage too. You say he can't be counted because of his age, but will this still be true in 5 years?

It sounds to me like you need a 5 year plan to save as much as you possibly can, at which point your savings plus a mortgage at 4.5x your joint income should put you in range.

4.5x your expected 21k in 5 years would be 94.5k at that stage
Plus 15k saved for your deposit would be ~110k
Plus 4.5x whatever your partners is on:

Assuming your partner is on minimum wage full time (hopefully the worst case scenario) that's around £13k you should be able to borrow 4.5x £34k, which would be around £150k, plus your £15k saved as a 10% deposit would put you at a £150k property with a £135k mortgage, or thereabouts.

Unfortunately, it's becoming harder and harder to afford a mortgage on a single salary, and I think your goal is going to have to be to get into the best possible position in 5 years time, or possibly before then depending on your partner's salary and how fast you can save ~£12k.

Alternately, perhaps it's worth looking at commuting: this has costs of it's own, but the price difference even within 15-20 miles can be extraordinary.

i couldn't agree more, i turned down repeated promotion and development opportunities to stay in a role i loved. You will see in my post that i mention perfectly valid reasons to stay in that role.
I was just pointing out that doing so makes it unlikely that the OP will active their financial/homeowning goals.

Not judging just pointing out the obvious really.

cashbackproblems

In addition to what has been said above, if you expect to earn 21k in 5 years and the flat is currently 120k assuming just modest rises could be at least 150-70k in 5 years (much more if you are south). 20k*4 only gives you 80k mortgage.

You need to find a better career or a new partner who has some income, as you and him both on 20k, 40k gets you to your goal easily.

Opinion

cashbackproblems wrote: »

In addition to what has been said above, if you expect to earn 21k in 5 years and the flat is currently 120k assuming just modest rises could be at least 150-70k in 5 years (much more if you are south). 20k*4 only gives you 80k mortgage.

You need to find a better career or a new partner who has some income, as you and him both on 20k, 40k gets you to your goal easily.

Yes. Bin your partner for something richer. The obvious idea.

seasideme

andyfromotley wrote: »

I would look for a new career. To work in a role for 5 years that will still leave you getting some 20% less than the average salary is not conducive to achieving your dreams.
There may be compelling reasons why you want to stay in this role. You consider it a vocation or you get huge job satisfaction which are perfectly valid, however just from a financial point of view this job will not enable you to reach your goals.

Please find me a better job then!

I am completing my current degree then going into nurse training, they start at £21k currently. If I stayed in my current role I'd be on something like £18k in 5 years.

seasideme

audigex wrote: »

There's more to life than money, AndyFromMotley: and a career change isn't always possible.

With 1-2 bed flats being 120k, though, I can't see buying being realistic until your partner can be counted on the mortgage too. You say he can't be counted because of his age, but will this still be true in 5 years?

It sounds to me like you need a 5 year plan to save as much as you possibly can, at which point your savings plus a mortgage at 4.5x your joint income should put you in range.

4.5x your expected 21k in 5 years would be 94.5k at that stage
Plus 15k saved for your deposit would be ~110k
Plus 4.5x whatever your partners is on:

Assuming your partner is on minimum wage full time (hopefully the worst case scenario) that's around £13k you should be able to borrow 4.5x £34k, which would be around £150k, plus your £15k saved as a 10% deposit would put you at a £150k property with a £135k mortgage, or thereabouts.

Unfortunately, it's becoming harder and harder to afford a mortgage on a single salary, and I think your goal is going to have to be to get into the best possible position in 5 years time, or possibly before then depending on your partner's salary and how fast you can save ~£12k.

Alternately, perhaps it's worth looking at commuting: this has costs of it's own, but the price difference even within 15-20 miles can be extraordinary.

He will be 58 in 5 years time, I'll be 38.

Maybe I should look to a 10 year plan but not sure the upper age limit for a mortgage.

The help to buy mortgage guarantee ends 2016.

andyfromotley

seasideme wrote: »

Please find me a better job then!

I am completing my current degree then going into nurse training, they start at £21k currently. If I stayed in my current role I'd be on something like £18k in 5 years.

Well thats impossible for me to do of course, i don't know your circumstances, skills and interest.

To make it clear i am not saying don't do the job, if thats your aim crack on and enjoy it. Theres nothing wrong with choosing a low paid job.

But if you want to achieve your goals as stated in the OP then you need to rethink. Your current career plan is highly unlikely to be able finance those plans. Just as there is nothing wrong with taking a low paid job because it is what you want, there is nothing wrong with choosing a career with higher pay either. There are many many career paths which will lead to you earning far more than your current or proposed one.

But these are big life changing decisions that only you can make.