First time buyer questions.

paulb567

My girlfriend and I are starting to look at buying a house but before we get much further we want to try and work out how big a mortgage we can get/afford. I.e. We don't want to see a house we realy like only to find out we can't get a suitable mortgage.

We are both working full time. My girlfriend is just starting as a teacher and earning £20500 per year which I work out to be about £1300 net per month. I have recently set up my own limited company working as an IT contractor so my income is a little more complicated. The amount on my payslips will only amount to £6000 per year. But the addional income from mileage expenses and distribution of company profit in the form of dividends will take my yearly net income to somewhere between £28000 and £40000. We have no real monthly outgoings other than the usual rent, bills, food, etc.

We are trying to work out how much we could borrow and what the average monthly repayments are likely to be.

The houses we like the look of in our area are between £150k and £180k. I have £20k saved for a deposit/other costs.


Questions we have are...

1. Is a mortgage of £130k - £160k obtainable / sustainable for our income?

2. What is an average monthly payment likely to be like for a mortgage like this. We'd want to make capital repayments rather than interest only.

3. Are we likely to be turned down because my income isn't fixed or stable? If its just a hefty payslip they need to see I can quite easily pay myself more next month, it just means I lose more to the tax man.

4. If the above question is true, would having my parents as a guarentor (spelling?) help?

5. Would a self certified mortgage be an option?

6. I currently have rougly £6000 on two credit cards on 0% introductory offers sitting in an ISA. Will having two credit cards weigh against me? I can quite easily withdraw the money from the ISA to pay off the cards whenever I want.


Any help appreciated,

Thanks Paul.

meanmachine_2

If you are confident that your business is a sustainable and going concern then you should self cert (I guess).

But don't be tempted to go over your budget just because you can. You also have to consider paying the mortgage should int rates double (which is unlikely but possible over a 25 year period).

Go see a broker.

Since you have no debts the process should be fairly straightforward.

vale_2

here here
your case is slightly complex...you need a good mortgage broker to search the market for you.....UCB(Nationwide) have got some good self certs at the mo.

isayoldchap

paulb567 wrote:

My girlfriend and I are starting to look at buying a house but before we get much further we want to try and work out how big a mortgage we can get/afford. I.e. We don't want to see a house we realy like only to find out we can't get a suitable mortgage.

We are both working full time. My girlfriend is just starting as a teacher and earning £20500 per year which I work out to be about £1300 net per month. I have recently set up my own limited company working as an IT contractor so my income is a little more complicated. The amount on my payslips will only amount to £6000 per year. But the addional income from mileage expenses and distribution of company profit in the form of dividends will take my yearly net income to somewhere between £28000 and £40000. We have no real monthly outgoings other than the usual rent, bills, food, etc.

We are trying to work out how much we could borrow and what the average monthly repayments are likely to be.

The houses we like the look of in our area are between £150k and £180k. I have £20k saved for a deposit/other costs.


Questions we have are...

1. Is a mortgage of £130k - £160k obtainable / sustainable for our income?

2. What is an average monthly payment likely to be like for a mortgage like this. We'd want to make capital repayments rather than interest only.

3. Are we likely to be turned down because my income isn't fixed or stable? If its just a hefty payslip they need to see I can quite easily pay myself more next month, it just means I lose more to the tax man.

4. If the above question is true, would having my parents as a guarentor (spelling?) help?

5. Would a self certified mortgage be an option?

6. I currently have rougly £6000 on two credit cards on 0% introductory offers sitting in an ISA. Will having two credit cards weigh against me? I can quite easily withdraw the money from the ISA to pay off the cards whenever I want.


Any help appreciated,

Thanks Paul.

First have you gone here http://www.experian.co.uk
Get a free 30 day credit check for you and you girlfriend.Then make sure you cancel both applications in a few weeks time.Check that there is nothing to interfere with your mortgage application.
I am no mortgage advisor or broker but if you do go and visit be prudent.Take away what advise they give and do your own search.Self cert
sounds expensive.
A good start is that you have a good deposit which will reduce your monthly payments and should not cost you the dreaded LTV http://www.moneyworld.co.uk/features/011506.features.html

See what the Alliance &Leicester can do for you.I think even your minimum
of around £48.5k may swing them to around 3 to 3.5 of your salaries.
Always opt for repayment and search for mortgage protection for low rates.
https://www.cavendishonline.co.uk can give you some good rates.Remember that the broker may charge you a fee or sell you a policy where you then are paying a higher amount every month.There are some fantastic rates if you
shop around and are both non smokers and in good health.Do your homework.
I will be able to give you other websites if you pm me :j :beer: