Which mortgage is right for me?

RGun

Sooner rather than later I will buy a property if at all possible.

I am 29 years young, am working as a bus driver, have saved for 10 years+ and I want to know if O can afford a property...

In my bank account I have a surplus of 10k. In an investment trust I have shares to the value of £40k. I own 25% of a property in Luton which my father owning the other 75%.

If I were to sell the 25% I believe I can get roughly 35k.

That makes roughly £85k I have available give or take a thousand or so.

Ive been looking at properties in Northamptonshire at a price cap of about £250k.

What likelihood do I have of getting a mortgage?

Lokolo

Whats your salary?

RGun

Lowest rate at the moment. £11.50 per hour, 38 hours a week contract.

Bring home in the region of approximately £340 per week.

After three years I'll earn £15 per hour. That'll be £570 before tax a week, so roughly 420-440 afterwards.

£1,600 a month (roughly) (in two years three months).

kinger101

Your annual pay before tax is in the region of £22,700. There are a few lenders which go to five times salary I believe, but this seems somewhat unlikely on those earnings. They might lend you £100K if you could find someone willing to do 4.5x. Some lenders might consider overtime if you can demonstrate it's regular income.

Will your father buy you out? Nobody wants to buy 25% of a house. Will you have any CGT to pay on this.

I believe you might be in a position to buy within Northamptonshire, but £250K seems unrealistic.

Whatever you're borrowing, the banks want to know whether you can meet repayments if the interest rates climb to say 6%.

RGun

100,000k? What kind of run down barn am I going to be living in. Really is quite frustrating.

VintageHistorian

RGun wrote: »

100,000k? What kind of run down barn am I going to be living in. Really is quite frustrating.

Depends on where in Northamptonshire you want to be really.

1 bed flat in Rushden for £85k - http://www.rightmove.co.uk/property-for-sale/property-66380750.html
1 bed flat in Kettering for £83.5k - http://www.rightmove.co.uk/property-for-sale/property-66380750.html
1 bed flat in Northampton for £85k - http://www.rightmove.co.uk/property-for-sale/property-67044074.html
1 bed flat in Daventry for £93k - http://www.rightmove.co.uk/property-for-sale/property-68247143.html

Obviously if you're wanting to buy a three bedroom detached house with a double garage and a large garden then you're going to struggle, but a browse on Rightmove suggests that it's not all rundown barns!

bowlhead99

You earn about 23k gross at the moment and in three years time after your promotion / pay rise it would be more like 30k. And then if you can borrow 4x those earnings on a mortgage, that's £120k borrowed - plus the £85k you already have (plus whatever you can save over next 3 years) which is the right side of £200k total. £250k might be unlikely though.

Still, as you say, you're only 29 years young. You might have another 70 years on the planet. So, you've no particular right to be able to afford the house now that you're looking for. Some people work all their lives and have a nice house in their 50s or 60s after a four decade career. You are less than half way into that so shouldn't expect to magically get a nice place as your first 'starter home'.

Hopefully better than a run down barn - how about a flat? You can get entire 2-3 bed houses (semis, end-terraces) for £200k in the Northampton area so a 2 bed flat should be easy enough.

Obviously you have to get someone to buy you out of your 25% of the property that your father owns most of. If he lives in it and doesn't want to move, that might be difficult. If it's just let out to someone you can probably make plans to sell it between you and take your share of the cash. I don't see too much of a problem really. I was late 30s before I could properly afford to buy, and that was buying with friends to get a nice place, which many would not want to do, so they would be stuck in something small and cheap.

RGun

No wonder so many people are throwing themselves off buildings.

gettingtheresometime

RGun wrote: »

No wonder so many people are throwing themselves off buildings.

I'm sure that once you've had a good night's sleep you realise what an over reaction that comment was

Cakeguts

RGun wrote: »

No wonder so many people are throwing themselves off buildings.

Could you please delete this comment it isn't kind to people who are really seriously ill. It is like making fun of someone who has cancer.

bowlhead99

RGun wrote: »

No wonder so many people are throwing themselves off buildings.

Would seem to be a bit of an extreme reaction to finding out that in two or three years time you will probably be in a position to have the deposit and salary required to afford a £200k property before you even get half way through your relatively low-paid career.