FTB Looking for reassurance

faceofreality

I am looking for a bit reassurance and maybe some helpful advice. As ive never taken out any sort of loan well apart from mobile contract. Ive lived at home forever and now think its time to go up and move out but im just a bit nervous on how much to borrow and dont want to over stretch myself so any advice welcome.

So me and my partners joint income is 38k so about 2500k per month only outgoings are she has a car on finance of £160 per month and we both have mobiles about £30 each. As a deposit we will have about 35k cash 7k in help to buy isa between us and my parents are gifting 20k i am looking at houses of about 150k is this realistic ? mortgage would roughly be 340 per month

Brokers_Of_Brighton

Hi there.

Based on your salary and deposit, the mortgage amount you require should be fine and most likely you'd be able to borrow a bit more in ideal circumstances, but that is providing both your credit profiles are good and you don't have excessive outgoings that will affect your affordability.

KR

ACG

As above, affordability should be a doddle.

General rule of thumb is around 4.5x your income plus your deposit. So there is plenty of room there.

juniordoc

If I were you I would aim to reduce the term and pay slightly more each month to reduce the overall amount of interest you will end up paying. Often the repayments don't change very much to reduce the term by a couple of years.
Good luck with your house hunting!

faceofreality

Thanks very much for your speedy replies no negative points on credit file apart from a fr and never thought about was just looking at 25 years might be good idea when settled and look to remortgage might do the numbers and see. Also thanks its exciting the house hunting but also suck a headache lol

Brokers_Of_Brighton

Are you aware of it being best practice to get an "Agreement In Principle" in place while you are viewing houses? Because if you do see your dream home and you want to make an offer, the agent will ask you for it in order to ensure your offer is able be followed through should the seller accept.

fewcloudy

Brokers_Of_Brighton wrote: »

Are you aware of it being best practice to get an "Agreement In Principle" in place while you are viewing houses? Because if you do see your dream home and you want to make an offer, the agent will ask you for it in order to ensure your offer is able be followed through should the seller accept.

What?

I've never been asked that.

ceb1995

faceofreality wrote: »

I am looking for a bit reassurance and maybe some helpful advice. As ive never taken out any sort of loan well apart from mobile contract. Ive lived at home forever and now think its time to go up and move out but im just a bit nervous on how much to borrow and dont want to over stretch myself so any advice welcome.

So me and my partners joint income is 38k so about 2500k per month only outgoings are she has a car on finance of £160 per month and we both have mobiles about £30 each. As a deposit we will have about 35k cash 7k in help to buy isa between us and my parents are gifting 20k i am looking at houses of about 150k is this realistic ? mortgage would roughly be 340 per month

That isn't overstretching at all, we recently bought a 150k house and we earn 30k between us before DH's bonus (the bank only counted a certain amount of bonus) and our mortgage is £680 a month and we're managing to pay for home improvements that need doing and have been able to sort the windows out on finance so i can't see you having any problems

ACG

Brokers_Of_Brighton wrote: »

Are you aware of it being best practice to get an "Agreement In Principle" in place while you are viewing houses?

Who says it is best practice?
I take the complete opposite approach.
If I get a customer a DIP today and it takes them a week to find a property, the best lender today, may not be in a weeks time.

If I get them a dip today and it takes 40 days to find a property, they will need a new dip, meaning another DIP is required.

If you are only getting a DIP with a soft footprint, then it is not worth the paper it is printed on.

All of this assumes the DIP given to the customer does not display the maximum lending amount, otherwise you are going in to an estate agents showing them what you can afford.

Lilla_D

An agreement in principle (AIP) or decision in principle (DIP) are the same thing. It is literally what it says on the tin: a lender in theory agrees to lend you a certain amount based on your personal details and credit history. This can be considered an initial gauge to see that you can get the required mortgage and estate agents like to see that you have it. Having an AIP/DIP kind of sends the message that you checked your mortgage options and you're potentially good for the money.

However, it is enough to get one, as having more will not make you a better buyer, but by accumulating credit searches, you may just ruin your chances for an actual mortgage. So when you're seriously starting to look around for properties, it may help you if you have an AIP/DIP, but just remember that one is enough

P.s. I agree with ACG, only get it when you really need it. And if you don't find a property within the AIP validity period, don't panic, you don't need a new AIP just for the sake of it.

Brokers_Of_Brighton

Lots of estate agents working in competitive areas will prioritise offers from customers that have an AIP/DIP over offers without one.

I agree with everything you've said regarding searches, but I personally would get an AIP/DIP in place to ensure my client doesn't lose the property if there are multiple offers being made.