FTB Joint Mortgage with a Student

stu1892

Hi

I've read through quite a few of the FTB threads and can't find anything with the same 'twist' as my query. So here goes...

I'm currently looking to buy a flat and I’m in the middle of building up a decent deposit. I earn about £17k. I was looking to get a flat for around £80-90k for myself and with approx 10% deposit, repayments were going to be around £390-430 per month. After bills etc wouldn't be a lot for me to play with for that month.

However, a friend suggested we buy together, bigger deposit, making my repayments smaller, potentially getting a bigger place. Great.
Thing is, he's a student nurse with a part time job. He gets a bursary every month, his weekend job pay and I think some pay for another part time nurse job which is temporary. He thinks he earns around £13k after tax, which would be fine for repayments. This doesn't hide the fact that he's a student though.

Is their any chance of him getting a mortgage or any way around this at all?

Any help appreciated.
Cheers,
Stu

Doozergirl

Don't buy with a friend. A mortgage has a 25 year term. Not that many friendships do.

PasturesNew

Your friend's income, taking home £13,000/year is the equivalent of a single person earning £16,500 and being taxed normally on it.

But as Doozer says: don't buy with a friend.

Go buy yourself a TV and buy a couple of newspapers this week.... prices are dropping. You've obviously not been paying attention.

stu1892

Quite suprised at the negative thoughts on buying with a friend.

In theory, is it not simple enough to get the mortgage over 25yrs for example on 3/5yr fixed rate and sell up after that term, getting our own places?

Yes, house prices are dropping, but not an obscene amount like me and millions of others would like

CLAPTON

Buying with a friend can work but you need the think very very carefully first
In addition to the issue of how well you get on there are many practical issues.

Does one want nice furntiture and stuff and the other doesn't or can't afford it?
But the main problem is how do you exit from the arrangement...

so if after 1 year one wants to leave what happens?
Maybe the other can't afford to buy the other out so is forced to sell up.
What if the house has dropped in value (not exactly unlikely in the current climate?)
Or if one loses their job and has no money... you will both be jointly responsible for the mortgage.
You will be financially linked to the other via the mortgage .. if one has a poor credit record then the other will suffer too.

as I say it can work but think about all the practical and financial things before you do

pinkshoes

The maths doesn't add up to buy on your own.

Lenders have tightened their belts, and lending multiples are much lower, perhaps 3x your salary maximum.

£17k x 3 = £51k, so unless you have a £30k deposit, you possibly won't be able to afford a £80k property!

If you're going to buy with a friend, agree things BEFORE you sign (budget for furniture etc...), then don't fix the mortgage for too long, just incase one of you wants out.

2 bed flats tend to be a better buy than 1 bed, as they have a broader market when you come to sell (suitable for singles, couples as well as those with 1 or even 2 kids).

PasturesNew

stu1892 wrote: »

Yes, house prices are dropping, but not an obscene amount like me and millions of others would like

You're so impatient. A crash doesn't happen overnight.... it takes a few years. Industry experts they say are admitting 35% isn't unreasonable.

This would take £80k down to £52k

Imagine the following drop of just 4% per year:
2008: £80k
2009: £75k
2010: £71k
2011: £66k
2012: £62k

Now, if you planned to save just £4k/year you'd have a much bigger deposit too.

stu1892

Thank for all the replies.

I am impatient, yes. The thing is, i'm 24, i would like to leave my parents home soon. If i was to wait, turn 29 and still be living with my parents doesn't bear thinking about!

After reading what's been posted, if i was to buy sooner by myself, would it be less of a risk, bearing in mind i could happily stay there until the market crept back up etc? Or am i completely wrong with that.

Sorry, total novice

Kez100

stu1892 wrote: »

Thank for all the replies.

I am impatient, yes. The thing is, i'm 24, i would like to leave my parents home soon. If i was to wait, turn 29 and still be living with my parents doesn't bear thinking about!

After reading what's been posted, if i was to buy sooner by myself, would it be less of a risk, bearing in mind i could happily stay there until the market crept back up etc? Or am i completely wrong with that.

Sorry, total novice

No need to stay with your parents - you could rent. Means you can easily move if you marry, have children or find better job prospects elsewhere.

As for creeping up markets - you have to wait for it to bottom out before recovery even starts. That may be quick but it could also take a long time and over ten years isn't unrealistic from the last crash. Do you see yourself in this property in 10+ years time?

In the last crash my husband (boyfriend at that time) wanted to buy a place and I pursuaded him not too. It wasn't me being clever financially just he was buying in an area I didn't want to live. We waited a year or two for the market to drop and it did - we bought our first home then thinking 'this has to be the bottom of the market'. Oh no it wasn't......for three years it continued to fall and we then wanted a family and to move closer to my work. We had to save 10% of the value to get ourselves out of negative equity, which we did. If we had bought the property my husband was looking at we would have needed to find 30%. Those percentages in todays market are not chicken feed.

Obviously, the gamble is finding the bottom of the market. That is impossible to tell as crashes tend to go in fits and starts with little gains making everyone sit up and think 'buy, buy, buy'....only to find a couple of months later there are monthly losses again. Well, that was our experience anyway.

PasturesNew

stu1892 wrote: »

I am impatient, yes. The thing is, i'm 24, i would like to leave my parents home soon. If i was to wait, turn 29 and still be living with my parents doesn't bear thinking about!

Rent then. Renting is the new "smart money" lifestyle.

stu1892 wrote: »

If i was to buy sooner by myself, would it be less of a risk, bearing in mind i could happily stay there until the market crept back up etc? Or am i completely wrong with that.

Say it takes 10 years to creep back up again.... what would be the point?
You'd be stuck in your first choice of property all those years.

You're young. You will want different things over the next 10 years. Your life will change.

And: the first house you buy you'll probably hate and want something better/different next time.

Buying costs you £000s to get into, then the mortgage is often up to double what renting the same property would be, and there's the responsibility and cost of fixing things.

Why tie yourself down to that?

rjm2k1

Sounds like a nightmare waiting to happen and your friendship could be strained either way. Better to not be financially linked to someone you have no real 'control' over.

You say you could potentially get a bigger place, but do you actually NEED a bigger place?