first time buyer help needs help

emmamc252

my boyfriend and I are just starting to look at buying our first property. there are 2 things that we would really like some advice with so if anyone can help us we would be so so greatful.
firstly, i am a newly qualified teacher, i begin my first job on the 1st of september, as with nearly all teaching posts, my initial contract is temporary for 1 year, we are both worried that this will effect my eligibility tog et a mortgage. please could anyone give us some advice on this, this is our biggest concern!

secondly, presuming that we can in fact get a mortgage, we would like some advice on finding what amounts the different banks will offer us, there seems to be a huge difference between some of the mortgage calculators and we were wondering if there is any way to compare the amounts they will lend you. advice on how much we could expect to get a mortgage for would also be appreciated, we earn £20000 each a year, neither of us have any debt what so ever, no credit cards, my student loans are all payed off etc, and we have £20000 savings to use as a deposit and to get us started.
any advice is much appreciated and i will be checking the forum regularly so if you need any more info please just let me know.

thanks everyone!

homer_j_3

Its not what you can borrow, its what you can afford to repay that counts.

Work out a budget and then work backwards. How much can you afford to pay for your mortgage each month.

emmamc252

we have worked out a very rough budget. my wages are going to increase by quite a lot over the next 2 years as the school i am at are fast tracking me, paying for me to do my MA in special educational needs so that i can become the special needs co ordinator either next year or the year after. for this reason we are thinking that we can live very basically for 1 year and then after that first year we will be more comfortable and after 2 we will be fine financially. we are thinking for this reason an interest only mortgage maybe best at first and then after a couple of years switch to a payback scheme.

we will be taking home just over 2300 between us, after tax, ni, pensions etc.
we believe including cars, travel expenses for me and general bills and food we could afford £1000.
as i said we aren't expecting the first year to be easy.

so we think we will have £1000 to spend on mortgage repayments.

Lavendyr

Have you lived together before? If not I would first of all recommend that you rent together for a short period (perhaps a year, so that you can save some money - renting typically being cheaper than mortgage repayments) just to make sure that everything goes smoothly!

It just sounds as though you have never lived together (or even away from home) before, because you say you have a "rough budget" which implies that you're not really sure of what your other living costs might be. Apologies if this is not the case!

My concern with what you're saying is that with a mortgage a rough budget is never a very safe idea. If you have lived away from home before you should have at least some idea of what bills and expenses might be. If you would like some suggestions of a monthly budget from people already in a similar situation to the one you will be in, I'm sure there will be plenty of people on here willing to help by posting their monthly budgets to give you some ideas. But my advice would be to work out your expenses as carefully as you can now, so that you have as realistic an idea as possible of what you can afford to pay towards a mortgage.

As things stand, if you could genuinely afford £1000 per month, you could borrow £160,000 over 25 years at 7% on an interest-only mortgage (assuming someone would lend you 4x salary), or £140,000 over 25 years on a repayment mortgage. However this doesn't leave you much leeway if interest rates rise. If the type of property you would need is much more than £150,000 in your area, therefore, you may be better off waiting for the housing market to settle down and renting & putting as much aside as you can.

Hope that helps

BullyCornedBeef

PLEASE PLEASE PLEASE DO NOT GO TO THE BANKS!

Get yourself an apointment with a whole of market mortgage broker. The whole of market part is vitally important here. Banks will flog you their best deals that are not the actual best deals on the market - the whole of market broker will look at nearly 200 lenders for the best deal. They basically are not as limited in their offerings as banks.

Also - do not let an estate agent arrange you to talk to their financial person unless he/she is whole of market (do ask).

I was in the very same situation as you last week... I just got an offer accepted on my first flat.

This site was a great crash course into being mortgage savvy. You should read Martins mortgage guide on this site before you even call the broker.

Good luck.

homer_j_3

BullyCornedBeef wrote: »

PLEASE PLEASE PLEASE DO NOT GO TO THE BANKS!

Get yourself an apointment with a whole of market mortgage broker.

Yes that will give you more choice than what your bank can offer.

The whole of market part is vitally important here. Banks will flog you their best deals that are not the actual best deals on the market - the whole of market broker will look at nearly 200 lenders for the best deal. They basically are not as limited in their offerings as banks.

Whilst I see what you are trying to say, I feel you could mislead the OP here.

Your bank does not give you advice. They will try to give you enough information to allow the customer make an informed decision. A mortgage adviser who gives true advice will tell you which product is right for you as an individual. The client does not choose. The advantage of this is that as a customer, you will not risk choosing the wrong product or deal which could be a lot more expensive over a period of time.

A whole of market adviser has to have access to sufficient lenders who will provide enough different mortgages to be able to represent what is out there in the marketplace. I am not sure where 200 lenders has come from, I dont think there are that many but I could be wrong.

You can be a whole of market mortgage adviser with as little as 10 lenders on a panel. It is imperitive that you fully qualify this statement with any adviser.

I for example am a whole of market adviser now and have access to 60+ lenders and can go off panel without permission. So bearing in mind some people with 10 lenders say they are whole of market, there are differences between whole of market advisers. Where I worked (well still do until end of this week) they have nearly 40 different lenders but didn't class myself as whole of market. I therefore have more lenders to choose from that a supposed whole of market adviser.
[/quote]

Also - do not let an estate agent arrange you to talk to their financial person unless he/she is whole of market (do ask).

Once again, ask for a list of lenders that they deal with and go with the one who offers most choice, if this is through your EA or through a local independent it shouldn't matter. You shouldn't need to pay for the advice also.

I was in the very same situation as you last week... I just got an offer accepted on my first flat.

This site was a great crash course into being mortgage savvy. You should read Martins mortgage guide on this site before you even call the broker.

Good luck.

Yes it is a good reference but make sure you fully understand it and if you are ever in doubt about anything, ask the question!

cells

emmamc252 wrote: »

my boyfriend and I are just starting to look at buying our first property. there are 2 things that we would really like some advice with so if anyone can help us we would be so so greatful.
firstly, i am a newly qualified teacher, i begin my first job on the 1st of september, as with nearly all teaching posts, my initial contract is temporary for 1 year, we are both worried that this will effect my eligibility tog et a mortgage. please could anyone give us some advice on this, this is our biggest concern!

secondly, presuming that we can in fact get a mortgage, we would like some advice on finding what amounts the different banks will offer us, there seems to be a huge difference between some of the mortgage calculators and we were wondering if there is any way to compare the amounts they will lend you. advice on how much we could expect to get a mortgage for would also be appreciated, we earn £20000 each a year, neither of us have any debt what so ever, no credit cards, my student loans are all payed off etc, and we have £20000 savings to use as a deposit and to get us started.
any advice is much appreciated and i will be checking the forum regularly so if you need any more info please just let me know.

thanks everyone!

interest only you can borrow 200k on a 6% IO mortgage.

you will probably be able to buy a property for 220k, put down 20k deposit and the bank foot the 200k.



if you where on a tight budget you should be able to live on 800pm quite easily (remember this doesn’t inc rent/mortgage)


that would give you 300k budget

homer_j_3

300k of a 40k a year income.... thats over 7x salary. Ouch!

I think you need to try and do a thorough budget and then look through your bank statements and account for every transaction possible. Where you cannot, put that in your contingency. Clearly your spending habits may change when you become a home owner so make realistic adjustments. EG. If you spend half your wage on handbags and shoes or going down the pub, then you will have to cut this back seriously but you wont stop doing it.

I would say that experience says no more that 40% of your take home pay should go towards your mortgage and this will make life comfortable (so around £900 per month tops. I would try and go on repayment if you have no investment strategy and live within your means. You will get a lot further in the long run by doing this.