FTB - Theoretical Scenario

Liam92

So, the wife and I are looking at our plan for the next two years or so, with a view to buying a house in Q3/Q4 of 2021. I appreciate, therefore, that any and all advice given now is subject to change by then!

Figures for perspective:
1 x Salary (£38,000 - £39,000)
2 x Financial Dependants (Wife & 1 Child)
Likely to have additional child by Q3 2021 (all being well!)
Property: Let's say £225,000 (New Build using the Govt Help to Buy Scheme)
Deposit: 10% (Two H2B ISA at £9,000 each and £4,500 in Savings elsewhere - H2B ISA quoted above does not include 25% bonus)
H2B Scheme at 20% would be £45,000 so a mortgage requirement of (£225,000 - (£45,000 + £22,500)) = 157,500 (Maths done on the fly but I think that's correct!).

No Credit Cards/Outstanding Credit/CCJ and both have Credit Score (Experian) in the high 900's (I appreciate its relative irrelevance in this question).

Essentially, the later we leave it the higher the deposit (lower mortgage) to the tune of around £800 p/m so the advice may well be to move things to the right Q1/Q2 2022.

Anyway, our discussion is primarily regarding affordability and dependants; what is the impact of 2/3 dependants on the above scenario?

Thanks in advance for any response!

BoGoF

There's plenty lenders online calculators that you can put those details into. Every lender will have a slightly different approach. But 3 dependants will have a big impact on a £39k salary for affordability.

Oh, and for relative irrelevance re Experian credit score.....make that total irrelevance

Retired_Mortgage_Adviser

157k borrowing with 39k income and 2/3 dependents, no debt - should not be too complicated for a decent broker.

Which region of the country will you be buying in? From April 2021 the HTB scheme introduces regional property caps.

Liam92

RMA, I've ran a couple of Affordability Calculators online this morning in response to both posts and the trend appears that £157K should be achievable so that's promising.

In terms of location; likely East or West Midlands so we fall within the criteria for that also.

BoGoF, thanks for the comment ref Credit Scores, duly noted!

amnblog

You cannot borrow more than 4.5 times household income under the Help to Buy scheme.