First Time Buyer Advice

ts1989

Just looking for some advice. Have done some online searching but felt it might be best to try and get some input from people who know the industry.

Single late twenties male with no dependents and a pretty perfect credit score looking to purchase my first property and trying to get an idea of what I can afford. Properties in my area are £300k+ (Greater London).

I work full time and my income is around £41k a year and I would have a £70k deposit to put towards the property.

I spoke with HSBC earlier who previously offered mortgages at 5x times your salary but they have said in the past few months they have now capped this at 4.75x regardless of your credit history.

Are brokers able to offer better deals than banks in terms of how many times your salary can be multiplied? Are there any banks out there that offer (or in excess of) 5 times your salary?

Lilla_D

Well, one of the high street banks can go to 5.5 times income, but unfortunately not in your circumstances. I also know of a small building society, who can do 6 times, but you're right, generally the ceiling is 5 times income.

However, it may be worth considering whether you really want to stretch that much or you'd be better off considering alternatives:
- First time buyer schemes with family help accepted for example as a deposit into a savings account or as a collateral on the parental home or using guarantors;
- Help to Buy with 20% government loan to add to your already sizeable deposit (you mentioned that you were looking in Greater London, so I assume that it's not within the 40% area of London);
- Shared ownership where you could buy 75% share and then build up your ownership to 100% in a few years' time;
- Buying together with someone else, e.g. friend, girlfriend, sibling;
- Use one the building societies' scheme where they take into account expected rent from a spare room in addition to your own earned income

ts1989

Thanks for your reply. The only high street bank I can find that offer 5.5 times also comes with having to have there premier bank account which requires a salary of £75k which isn't a range I am in.

Would it possible to point me in the direction of the small building society that can offer 6 times?

Lilla_D

You're welcome. Based on the above, you seem to have found the high street bank that I referred to, but I'm afraid I can't name lenders on the open forum here.