Looking for friendly advice as a hopeful first time buyer as a low earner

AnxiousAdult

Hi all,

Just after some advice really as currently feeling low in regards to my future.

So I'm a single 33 year old male from the East Midlands. After a few setbacks such as redundancy and a relationship breakdown in the last few years, I'm currently living with my parents saving money.

After a period of unemployment, I managed to find work, but as a low earner. This breaks down as 16k basic, guaranteed bonus of 4k (1k every 3 months), and guaranteed overtime of 2.5k, giving me an annual gross of £22,500. I have three P60's to show I have earned this for the last 3 years.

I currently have savings of 15k, and will have 20k by the end of the year with no debts. I'm hoping to use 12.5k as a deposit, 2k for the fees, 3.5k for basic furnishings, and the remainder as emergency funds.

House/Flat prices i'm looking at are around 95-100k. These are obviously small, not very appealing properties in half decent areas, but I'm aware this is my only option. I can live with this.

Will mortgage companies take into account my bonus and overtime? I've read some won't and some will only take 50%. As without this, getting a mortgage on an income of 16-19k means i'm way off moving out, and will have to spend at least another year saving to get a bigger deposit. An online quote with my bank says i can borrow 68k based only on my basic of 16k, but if I put my whole salary including bonus and overtime, its 97k, I'm desperate to move out, I feel it hinders my chances of a relationship as a low earner at my age living at home is hardly going to appeal to the ladies.

What do you guys think my best options are? I know the obvious answer is to find a better job but its hard round here, I am not qualified in anything and my job is very niche. Pay-rises are pretty much out the question too from what I can gather. So I need to act like for the timebeing this is my earning potential.

I'm worried about my future. I'm considering saving the 20k but then renting, in the hope of finding a partner which will make it easier to buy, or finding a better paid job. But inside I'd really not rather rent and am bleak about finding a better paid job anytime soon.

Am I screwed ?

Debtslayer

AnxiousAdult wrote: »

Hi all,

Just after some advice really as currently feeling low in regards to my future.

So I'm a single 33 year old male from the East Midlands. After a few setbacks such as redundancy and a relationship breakdown in the last few years, I'm currently living with my parents saving money.

After a period of unemployment, I managed to find work, but as a low earner. This breaks down as 16k basic, guaranteed bonus of 4k (1k every 3 months), and guaranteed overtime of 2.5k, giving me an annual gross of £22,500. I have three P60's to show I have earned this for the last 3 years.

I currently have savings of 15k, and will have 20k by the end of the year with no debts. I'm hoping to use 12.5k as a deposit, 2k for the fees, 3.5k for basic furnishings, and the remainder as emergency funds.

House/Flat prices i'm looking at are around 95-100k. These are obviously small, not very appealing properties in half decent areas, but I'm aware this is my only option. I can live with this.

Will mortgage companies take into account my bonus and overtime? I've read some won't and some will only take 50%. As without this, getting a mortgage on an income of 16-19k means i'm way off moving out, and will have to spend at least another year saving to get a bigger deposit. An online quote with my bank says i can borrow 68k based only on my basic of 16k, but if I put my whole salary including bonus and overtime, its 97k, I'm desperate to move out, I feel it hinders my chances of a relationship as a low earner at my age living at home is hardly going to appeal to the ladies.

What do you guys think my best options are? I know the obvious answer is to find a better job but its hard round here, I am not qualified in anything and my job is very niche. Pay-rises are pretty much out the question too from what I can gather. So I need to act like for the timebeing this is my earning potential.

I'm worried about my future. I'm considering saving the 20k but then renting, in the hope of finding a partner which will make it easier to buy, or finding a better paid job. But inside I'd really not rather rent and am bleak about finding a better paid job anytime soon.

Am I screwed ?

You really shouldn't be so hard on yourself, look at what you've achieved: Found employment and saved yourself a very respectable deposit. You've also factored in buying and furnishing costs and an emergency fund; very sensible.
If I were you I would now be contacting an Independant mortgage broker. They will know which lenders to approach for you and will advise how much you could borrow
Good Luck and let us know how you get on

ViolaLass

£3.5k for 'basic furnishings' seems like rather a lot. You can get away with a lot less than that, although I appreciate that that won't help you that much.

Thrugelmir

Have you opened a Help to Buy ISA yet?

AnxiousAdult

Debtslayer wrote: »

You really shouldn't be so hard on yourself, look at what you've achieved: Found employment and saved yourself a very respectable deposit. You've also factored in buying and furnishing costs and an emergency fund; very sensible.
If I were you I would now be contacting an Independant mortgage broker. They will know which lenders to approach for you and will advise how much you could borrow
Good Luck and let us know how you get on

Hi Debtslayer, thanks for your reply.

I appreciate your support! I guess I could be in a worse situation. Yes, seeing a broker does seem the logical next step, I was thinking of going when I have the 20k though. If I went to one now just for advice and too see what my options are would I have to pay?

Thanks

AnxiousAdult

ViolaLass wrote: »

£3.5k for 'basic furnishings' seems like rather a lot. You can get away with a lot less than that, although I appreciate that that won't help you that much.

Hi ViolaLass, thanks for your reply.

I have no furniture though, so I'm taking into account everything from a bed, to a TV, to kitchen appliances, right down to cutlery! I know I could buy cheaper items but would like to buy the best I can afford.

Thanks.

AnxiousAdult

Thrugelmir wrote: »

Have you opened a Help to Buy ISA yet?

Hi Thrugelmir, thanks for your reply.

Honestly, no I haven't. I have my savings in a standard savings account with my bank. It was my understanding it would take years to benefit from this scheme though? I'm hoping to move out in around 8 months...so would it be worth it?

Thank you.

Lolly88

AnxiousAdult wrote: »

Hi Thrugelmir, thanks for your reply.

Honestly, no I haven't. I have my savings in a standard savings account with my bank. It was my understanding it would take years to benefit from this scheme though? I'm hoping to move out in around 8 months...so would it be worth it?

Thank you.

Yes! Open one asap.
You only need a minimum of £1600 in the account before you can get the bonus which is equivalent to 3 months of savings (you can deposit £1200 in the first month and then £200 per month thereafter)

ViolaLass

AnxiousAdult wrote: »

Hi ViolaLass, thanks for your reply.

I have no furniture though, so I'm taking into account everything from a bed, to a TV, to kitchen appliances, right down to cutlery! I know I could buy cheaper items but would like to buy the best I can afford.

Thanks.

Then it's a question of choosing your priorities.

Debtslayer

AnxiousAdult wrote: »

Hi Debtslayer, thanks for your reply.

I appreciate your support! I guess I could be in a worse situation. Yes, seeing a broker does seem the logical next step, I was thinking of going when I have the 20k though. If I went to one now just for advice and too see what my options are would I have to pay?

Thanks

It depends how they work. I believe quite a few are payment on completion. No harm in contacting them and asking if you would have to pay anything upfront. It's probably worthwhile finding a good one now and then when you do start looking for properties you will have a broker to contact to get the ball rolling. They will hopefully put your mind to rest regarding any concerns you have about getting a mortgage.

Debtslayer

AnxiousAdult wrote: »

Hi ViolaLass, thanks for your reply.

I have no furniture though, so I'm taking into account everything from a bed, to a TV, to kitchen appliances, right down to cutlery! I know I could buy cheaper items but would like to buy the best I can afford.

Thanks.

It's probably sensible to over estimate than underestimate.
Although you could get cheaper items if furniture when you first start out. But things can get very expensive when you start needing to decorate, carpet, furnish etc.
Once you know you can get a mortgage and start looking for property i would then start shopping around for all the basic items you need in sales. Don't leave it until you are actually moving I and have to go and buy from nearest shops