First Home

MortgageSeeker2018

Hello. I am looking to buy a first property with my partner at some point in the near future. I have saved £20k and our combined earnings are approximately £35k. As far as I know, the maximum amount a bank would lend us is four times £35k, ie. £140k. Add to that the £20k deposit and we could afford something worth £160k. The problem is that in our area, a small house is approximately £200k. So we are short by £40k. The only thing I can think of is to look at buying a flat or apartment, which are cheaper. So my question is do you think purchasing a flat/apartment is a good idea as a first property?

Grezz24

I have seen examples on these forums of people getting 4.5 - 5x their yearly salary, i think it depends on the lender for what they will offer.

GoingOn30

It also depends how old you are and what age you are likely to retire at. If you can take on a 30 or 32 year term they may lend you 4.5x salary.

Living in the Southwest we would never have been able to afford a house as FTB and have a small 2 bed flat. If we have kids we will outgrow it quite quickly so will likely only be here 3 or 4 years but I wanted to get on the ladder and get away from landlords and letting agents.

Look at how to really minimise your outgoings and maximise your savings in this last 6 months before you buy and you might make it up to a 15% deposit. Best of luck!

MortgageSeeker2018

I am 34 and my girlfriend is 36, so hopefully we could get a 30 year mortgage. On another note, would it be worthwhile my girlfriend getting a credit card to improve her credit rating? I am already doing this.

Thank you for both replies, very helpful.

MortgageMamma

Credit cards are a good idea if you pay the balance off monthly and keep control of your spending.


Plenty of lenders will go above 4 x joint income, its just about finding the right one. Speak to a mortgage broker and get them to do an affordability/viability assessment. There is such much more on offer than whats in the high street banks.


A 10% deposit is perfectly adequate providing you have a decent credit rating.

cjv

If you have not already considered the schemes on offer from the government they might be worth a look:

https://www.helptobuy.gov.uk/

InLoneShadows

Currently buying a flat and we achieved 4.75x joint on me and my partner's joint income. We also went for 10% deposit.

Nationwide were the lender, good rates but we have found that they are exceptionally slow to turn anything around for us.

My advice would be to get a good broker and let them do the work for you.

Good Luck

MortgageSeeker2018

Thanks for all the replies.

I have a cash LISA with Skipton, but no help to buy account. Should I look at getting one?

What's the deal with brokers, how does that work?

Would my girlfriend's credit rating come into play if we got a joint mortgage?

Many thanks.

GoingOn30

Not credit rating as such but yes both your history will be taken into account in a joint mortgage application.
If you do go through a broker find one who doesn't charge a fee, word of mouth reccomendations are a good place to start.
Start booking some property viewings and see what you can get for your money.

cjv

MortgageSeeker2018 wrote: »

Thanks for all the replies.

I have a cash LISA with Skipton, but no help to buy account. Should I look at getting one?

If you feel you can make use of the help to buy schemes then it won't hurt to check your eligibility.

I am signed up to the shared ownership scheme as I am planning to use that to get onto the property ladder. Similar to yourself, although different numbers, I do not have the income to afford the type of property I would like in my area so am planning on getting a new build through shared ownership and then staircase to full ownership.

Do some research into all of the schemes as they are not suitable for everyone, then take it from there. It's nice to have more options.

Hutchd97

Hi,

Lenders really only use income multiples as a maximum, they then take into account amount of committed outgoings (credit cards and loans repayments) which could then reduce the maximum they will lend. The maximum income multiples is around 4.75x at the moment generally, there is one that I know of who could look up to 5x if credit scores are good. Getting a credit card is a good idea in the longer term, however it will initially go down as a new commitment so it may actually reduce her credit score for a short time.

If you have any new build sites in your area it may be worth while to check if they do the Help to buy scheme. It would be a good idea to open a HTB ISA each anyway as you have the cash to open them anyway (£1,200 each) and then transfer £200 per month into them, it is free money from the government if you do then use it for the house purchase (doesn't have to be a purchase through the HTB scheme).

Many thanks