30K shortfall on Borrowing at First Search?

Adamc

Hi

My partner and I are first time buyers and have our hearts set on a family property costing £260,000.

We both earn a basic wage of £21,000 and have a deposit of £30,000, with several thousand left over to get started.

I am currently undergoing training for a promotion after which my income will increase by £9,000 per annum. My partner is also earmarked for promotion so it is just a matter of time before her income increases too.

Our only dept is one student loan (which the bank are not asking about because it is taken at source?)

How can we meet this shortfall? Would a guarantor on the same income help? :money:

csgohan4

guarantor will not be able to meet shortfall but be there when you don't pay your mortgage.


Your lenders will only go on the now and not if you get a promotion. I.e factual objective wages.


It seems you are pushing your budget too far. Maybe the bank of mum and dad?

bmthmark

I was in the same situation when I started looking many years ago. Unfortunately you either have to look at cheaper properties or ask a wealthy family member

I looked at a property slightly cheaper which needed work doing. I was able to carry out the work over time and eventually sold for a nice profit.

Hoploz

Welcome to the world of house-hunting. You can pretty much guarantee that your perfect property is available for only an extra £Xk outside your budget.

You will find this will happen regardless of what your budget is. If your budget is £1m, your ideal property will be £1.25m.

You have two things to try.

1) Make sure you are working with a broker who knows your finances like the back of his hand and can scour the whole market to find you the mortgage you are looking for.

2) Wait until your earnings increase. Not ideal as prices may increase in that time. But if option 1 doesn't come to fruition you have no choice!

AnotherJoe

Adamc wrote: »

Hi

My partner and I are first time buyers and have our hearts set on a family property costing £260,000.

We both earn a basic wage of £21,000 and have a deposit of £30,000, with several thousand left over to get started.

I am currently undergoing training for a promotion after which my income will increase by £9,000 per annum. My partner is also earmarked for promotion so it is just a matter of time before her income increases too.

Our only dept is one student loan (which the bank are not asking about because it is taken at source?)

How can we meet this shortfall? Would a guarantor on the same income help? :money:

"There's your Problem"

Looking at houses well outside your budget.

If BOMAD can't help, you'll have to wait or lower your expectations. And as Hoploz indicates, once your promotion comes in and you get your raise, unless you are careful, you'll then fall in love with a house at £290k. It's like choosing to fly business or first class, once you've turned left once, subsequent flights in cattle class are always a disappointment.

As your promotion is coming in soon I think unless BOMAD can help with a loan that doesn't need repayment until you remorgage, you are probably best off waiting for the pay rise and then making sure you set a top limit at what you look at, else it will be rinse and repeat.

Or buy a "fixer upper" though I think those are few and far between these days.

danslenoir

Adamc wrote: »

Hi

My partner and I are first time buyers and have our hearts set on a family property costing £260,000.

We both earn a basic wage of £21,000 and have a deposit of £30,000, with several thousand left over to get started.

I am currently undergoing training for a promotion after which my income will increase by £9,000 per annum. My partner is also earmarked for promotion so it is just a matter of time before her income increases too.

Our only dept is one student loan (which the bank are not asking about because it is taken at source?)

How can we meet this shortfall? Would a guarantor on the same income help? :money:

You are not going to be able to meet this shortfall.

Mortgage providers are only going to go by your current salary (not anticipated future salary) to work out how much they are prepared to offer you. Based on your current salary, according to the MoneySavingExpert 'how much can I borrow?' mortgage calculator you are likely to be able to secure a loan of up to £105,000, and may be able to secure a loan of up to £150,000. These are both well short of the £230,000 you will need to borrow to be able to afford your desired property.

Even assuming that you are both on a salary of £30,000 (in line with what you said about anticipated promotion), you are only likely to be able to secure a loan of up to 150,000, and may be able to secure a loan of up to £210,000, still leaving you short.

In short, you are looking at properties outside of your means, unless you can find substantial additional deposit from somewhere else (e.g. family gift), so will need to downgrade your expectations and the kind of properties you're looking at.

Cakeguts

Why are you looking at properties that you can't afford? This is bound to lead to disappointment.

Start again and only look at properties that are within your present budget.

csgohan4

I look at properties for £16million in Chelsea on Rightmove, but can only afford alot less than that.

You can always dream

Cakeguts

csgohan4 wrote: »

I look at properties for £16million in Chelsea on Rightmove, but can only afford alot less than that.

You can always dream

Yes but you don't post on here looking for help in ways to buy them.

DPDRC90

Seems completely unrealistic right now.

My advice would be to hold out for the promotions and see where you're at then.

kingstreet

Assuming the student loan payment is about £25 (as all lenders I can think of will take it into account) you should be able to borrow about £178,500 over 35 years.

No-one these days lends over five times income.

Your income in the future will generate the higher mortgage you need. In the future.