First time mortgage advice

getmore4less

JeffMason wrote: »

Ah, ok...

- 44
- 250k deposit maximum
- earning 29k (part time)
- no debts, good credit score (although very little credit card use at all)
- want to buy at around 350-400k

LTV 29%-38% that gets you the best deals as <50%

Multiple 3.5x-5.2x upper end might be a stretch with that income.

outgoings will drive the real affordability.

£29k gross, net £1,800

25y £150k 1.5% £600pm
20y £150k 1.5% £730pm
15y £150k 1.5% £920pm

Broker should be able to place the top end over 25y
depending on outgoing could be done by the time you are 60

Are you renting now?
As you are not getting into debt that is a decent guide on what you can afford for the mortgage and extra costs of owning over renting.

Another good thing to do are the SOA.
One based on current living
One based on owning a house with a mortgage.
https://www.lemonfool.co.uk/financecalculators/soa.php

With those you can see what your real affordability is

I would still be a little concerned over the short term nature of this purchase.

NewShadow

JeffMason wrote: »

Thanks! I assumed so, but didnt know for sure...
So I'm probably fine in that they'll say yes to a certain amount, but there's still a maximum they'll let me have based upon my income, right? Or does a large deposit change that at all?

As GM4L has posted, the actual amount they’ll loan will be based on affordability.

On the low end you’re looking to borrow around £100k - which online calculators give a crude estimate of repayment of about £400 pm - but lenders also have to stress test as rates won’t stay this low forever and they need to trust you’ll be fine when they go up.

They’ll consider your general financial conduct, your contractual commitments and random things like if your income is from contracting/self employment/benefits etc.

That’s why you’re likely to get £100k - maybe £125 - but how much further towards £150k is anyone’s guess...

Best thing to do would probably be to have a conversation with a broker and get their view followed by a DIP/AIP to give you a set amount.

JeffMason

Finding brokers via unbiased or vouched for is very tricky. Many say they wont touch a mortage under 250k and many look like dodgy estate agents. How does anyone narrow this down?

NewShadow

JeffMason wrote: »

Finding brokers via unbiased or vouched for is very tricky. Many say they wont touch a mortage under 250k and many look like dodgy estate agents. How does anyone narrow this down?

My mortgage is going to be in the region of £98k on a house I'm paying £130k for and my broker hasn't reported this being an issue...

Difference might be that mine's fixed fee rather that a percentage - so it makes no difference to the broker if it's 100k or 300k IYSWIM?

If you're not confident that the brokers you're seeing are 'decent' then I'd again recommend phoning/emailing four or five with a general enquiry as a FTB and seeing how confident you are with how they handle your questions.

If I were you, my email would be along the lines of:

I'm a 44yr old FTB, with £250k deposit and £29k income looking to buy a house valued in the region of £350-£400k with a term of approximately 20 years.

I have no adverse credit and approximately £x of unsecured debt. I would be the sole person named on the mortgage and it would be my main/only residence.

Can you advise on if you would consider I am in a position apply for a mortgage of between £100k-£200k at this time?

I understand a >£100k mortgage is more difficult to secure - would you be in a position to secure me such a mortgage if my chosen property were to require such?

Can you set out your fees for placing such a mortgage and when they would fall due?

Also, what you might not be considering is that you could possibly have a slightly larger mortgage - say a house for £350 with a mortgage of £115k - and keep £15k of your 'deposit' for furnishing and decorating/improving the property.

You won't know if that's an option until after you've had an AIP to see how much a lender would offer - then done the maths to see how much extra it'll cost you in repayments/interest to decide if it's worth it

amnblog

The ‘how much can I borrow calculator’ certainly does not give you an exact figure.

Totally pointless

You are better off with this one as supplied by ACG

Pre tax income x 4.5 = approximate lending potential

JeffMason

NewShadow wrote: »

My mortgage is going to be in the region of £98k on a house I'm paying £130k for and my broker hasn't reported this being an issue...

Difference might be that mine's fixed fee rather that a percentage - so it makes no difference to the broker if it's 100k or 300k IYSWIM?

If you're not confident that the brokers you're seeing are 'decent' then I'd again recommend phoning/emailing four or five with a general enquiry as a FTB and seeing how confident you are with how they handle your questions.

If I were you, my email would be along the lines of:



Also, what you might not be considering is that you could possibly have a slightly larger mortgage - say a house for £350 with a mortgage of £115k - and keep £15k of your 'deposit' for furnishing and decorating/improving the property.

You won't know if that's an option until after you've had an AIP to see how much a lender would offer - then done the maths to see how much extra it'll cost you in repayments/interest to decide if it's worth it

Thanks for this. Very very helpful. I've found a few to contact and am waiting to hear from friends who might have recommendations.

JeffMason

I've been asking estate agents about some properties that might work, and get questions that I'm not quite sure how to answer back. For example, they ask if I have a mortgage in principal already and about how I am funding the purchase "and if with a mortgage who is it with" - but I didn't think buyers had a mortage secured until after they've found a property so am not sure how to answer the question.

Any advice on how to deal with these kind of questions? Should I have all this sorted before seeing properties?

[Deleted User]

JeffMason wrote: »

I've been asking estate agents about some properties that might work, and get questions that I'm not quite sure how to answer back. For example, they ask if I have a mortgage in principal already and about how I am funding the purchase "and if with a mortgage who is it with" - but I didn't think buyers had a mortage secured until after they've found a property so am not sure how to answer the question.

Any advice on how to deal with these kind of questions? Should I have all this sorted before seeing properties?

I will be buying with a mortgage, I will confirm details if i were to offer on a property with your firm .

Something along those lines should be enough. They are asking so they can see if they can sell their own mortgage services

JeffMason

Can I get a little reassurance / clarification about the best mortgage advisor options - I've contacted a recommended advisor and they've been clear about their fee, which is due on completion. But they've also said they get commission from the lender - is that something to be worried about? Does it mean they'll be pushing me towards certain lenders?
Thanks all.