1st time mortgage on 18K salary

jack290292

Hi,

Son wants to take first step on to property ladder. He is single and earns just over 18K a year - he has a deposit of currently 45K.
We live in an area where property is very expensive so looking into part-buy. Would he get a mortgage on such a low salary or would it be out of the question - he does not have any other outstanding debts.

We are happy to furnish the place for him -so he would not have to worry about that!

Thanks for any advice!

glosoli

It is possible however lower salaries are often eaten up by a lenders expenditure model (national averages are used for a number of things when credit scoring). Perhaps a mortgage of around £45-60k might be realistic.

jack290292

Thanks, I thought that might be the case, was hoping around 75k but I think we might need help and advice to see if it's possible.

ACG

£18k should enable him to get a mrotgage of around £85k, possibly a touch more or less depending on the finer details.

With his deposit on top, you would be looking at a purchase price of around £130k as a maximum...ish.

kingstreet

This is shared ownership, so the rent & service charges are going to eat into his mortgage borrowing power.

He also has to meet lender and Government affordability requirements.

An experienced broker should be first port of call.

I'd say with £250 a month rent & service charges, he won't get more than £60k over 35 years.

ACG

kingstreet wrote: »

This is shared ownership, so the rent & service charges are going to eat into his mortgage borrowing power.

Good spot, I missed that.

jack290292

Many thanks both for your replies, gosh it really is hard to get on the propery ladder even with a good deposit. He is due for a pay rise in June but guess that will only be around 3% - will keep looking and speak to a broker...thanks for the guidance.

dalehitchy

I had a 10k deposit... Earn 20k ... And can get a loan of up to 85k. That means I can buy up to 95k (which I have just managed to do if everything goes through. Luckily East Midlands prices aren't too high.

I can imagine your son can get a mortgage of around 75k-80k ... Add his deposit he'd be able to buy around upto 125k. Depends on the area your in.... That gets you a decent 3 bed property here.

Newbie78

jack290292 wrote: »

Many thanks both for your replies, gosh it really is hard to get on the propery ladder even with a good deposit. He is due for a pay rise in June but guess that will only be around 3% - will keep looking and speak to a broker...thanks for the guidance.

If anything I've learnt from these boards is you have to be able to pay back the mortgage so size of deposit is only part of it. I've seen a lot of people with big deposits from parents,friends family and even saved up get declined because their salary wasn't big enough

kingstreet

Affordability and deposit are totally unrelated.

You calculate what is affordable mortgage-wise, then you add the deposit to get a maximum purchase price.

The days of being able to borrow more because of a bigger deposit and being a lower risk to the lender are largely in the past.