Help for 1st time buyer

ajay_182

Hey,

A little bit about me 1st. Im 25, a Firefighter and currently earn around £21500, that will go up to around £27500 in 12 months time. I have a min of 28 years 11 months to work before any pension. Credit score is good, as far as I know. Never had late payments, threating letters etc... Pay around £300 on car and debt loan at present.

So heres the deal. I want to buy my first home. Can anyone give me a rough idea of how much I can borrow? How long can I borrow it for (can I do a £30+ year mortage)? I know more deposit is always better, but is 5% okay? will i need 10% to get a long enough mortage etc...

Im looking at buying something in the range of 100 - 120k... hopefully.

Any advice would be great. Thanks all.

Martin_Moore

Hello Ajay,

Firstly most lenders at the minute are lending a maximum of 4 up to 4.5 times income. Each lender has different criteria some more generous than others. The existing loan costing £300 per month would be subtracted from the lenders affordability calculation which is different for each specific lender.

4.5 x 21.500 = £96,750 amount you could borrow if you did not have any existing loans

then the lender would subtract your existing loan monthly commitment from that amount.

So that is your biggest problem as it will not allow you to get to the £100k + that you require.

It sounds as though you have a good credit profile which would mean that you would be a Prime High Street Customer (meaning that should be able to make an application to any lender that provided the best product). With a good credit profile in the current market a 5% deposit could be enough and on based on your age of 25 a 30 year + mortgage would not be a problem.

Your main problem will be that based on your current salary. you will be restricted to borrowing less than what you require.

It would make sense to pay off the existing loans and credit cards and that would allow you to lend up to the amount you wish to mortgage.

ajay_182

Thanks Martin.

So best thing to do really is pay off any debt, wait till I get my pay rise and then go from there. Ive waited this long, whats another 12 months.

Very helpful, cheers.

dimbo61

ajay 182 save like mad will also help !!
first direct will only lend £100,000 on a £125,000 property
a £100k mortgage on there five year fixed offset at 5.49% worked out at
£555 a month for the first 5 years
so get as big a deposit as you can
offseting is also a great way to save GOOD LUCK

ajay_182

Thanks Dimbo, Saving is the best way. Just hard when it comes to the weekend, lol!!!

If saving is whats needed, then its saving I shall do. Bye bye to my all out spendin weekends !!

herbiesjp

HI ajay

Some lenders will offer you 5 times your income (less any debt payments) as you are a firefighter and will be classed as a professional.

HOwever, even on that basis, and the fact you have the outstanding loans means that you will not get close to the lower of the two house price figures you quoted

The pay rise would obvioulsy help a great deal in terms of mortgage amounts and affordability

dimbo61

clear loans with highest rate first then save into ISA,s barclays paying 6.5%
£3600 from april 2008, also start saving accout with local building society paying good rate to build up credit score and prove you can afford mortgage !!!
ask the bank of mum and dad if they can help
check out key worker scheme ? shared ownership with housing trust !!

ajay_182

Lots of good advice, thanks guys. Ill have a look at that key worker scheme. I think its a bit mad that even someone like me, and i regard myself as having a good wage compared to some others my age, cant afford a little flat or something! How on earth could you get your own place if you earnt 14/15k? It just isnt possible. Anyway, thats my moan over, lol.

Martin_Moore

Ajay,

As the other mortgage adviser said you can get 5 times your income and there are lenders who have a Keyworker definition(fireman might be on there occupational list of a Keyworker). It all depends how desperate you are to get on the property ladder.

First Time Buyers are stuggling to get Mortgages in your position as all the 100% plus mortgages have been withdrawn in the last fortnight or so. This would of allowed you to get nearly what you wanted.

If you could clear your debt and still have 5% deposit you may be able to lend 100k.

You must also take into consideration houses are very difficult to sell at the moment and some will be " Open to offers " as some are desperate to sell as they are struggling to pay the mortgage payments.