max we can borrow?

weesie81

after speaking to a mortgage broker we have been told the max we can borrow is 75k

is this right?
we have an annual household income of 25k
a deposit of 6k and a loan commitment of 185 a month for the next 5 years our credit rating is fair for hubby and good for me?

homer_j_3

Your mortgage broker has had a lot more information that what we have but it does seem low.

Based on the basic info you should be able to borrow more but the question is what you can afford, not what you can borrow.

What would you feel comfortable with repaying on a monthly basis and what would you need to borrow to get on the property ladder?

weesie81

hi we could afford to pay anything up to 650 per month and we are both under 30 so are willing to look at longer term & possibly even interest only to begin with?

we rent just now and its 500 down the pan every month, we have been renting 3 years now

homer_j_3

well your income would probably get you upto mid 80's plus you deposit then you will need money for legal fees etc.

Would that buy you anything?

epz_2

im guessing the reasoning is the the £185 a month is the equivilent of earning 2.2k a year less and 22.8k a year joint income is pretty low for two people to live on let alone if they have/get kids.

it should be pointed out that the interest on a mortgage is exactly the same as renting from the bank except the rental term is longer.

£500 a month rent doesnt sound that bad tbh, i would bang fire at the moment as mortgage deals are fricking horrible (only 18 months ago we were talking 4.7% deals, now they are like 6%) and house prices are static/falling in most places.

why not save hard now and try and repay the debt so you will be in a better position shortly

sarkin

First National do big income stretches, but with the market the way it is at the moment would you not be better off renting another 6 months?

minimike2

epz wrote: »

it should be pointed out that the interest on a mortgage is exactly the same as renting from the bank except the rental term is longer.

With the difference being that any increase in value on the property is the owners, not the landlords

beecher

minimike2 wrote: »

With the difference being that any increase in value on the property is the owners, not the landlords

With any decrease putting the owner into negative equity fairly quickly with a deposit of £6k.

meanmachine_2

minimike2 wrote: »

With the difference being that any increase in value on the property is the owners, not the landlords

And...

With the difference being that any DECREASE in value on the property is the owners, not the landlords.

I think this sentence is the more accurate at the moment.

Come on, broker. Give fair and balanced advice, mate.

Giraffeseeker

OK, same question from me (don't mean to hijack the thread but seems silly to start a new one).

Joint income £80K, no debts although OH pays £320 to ex in child maintenance (this is an informal arrangement based on CSA calculations - he just does a bank transfer each month). I receive £150 in maintenance from my ex pcm.

How much could we borrow? Thinking of around £200K (£50K deposit).

snarffie

tintingirl wrote: »

OK, same question from me (don't mean to hijack the thread but seems silly to start a new one).

Joint income £80K, no debts although OH pays £320 to ex in child maintenance (this is an informal arrangement based on CSA calculations - he just does a bank transfer each month). I receive £150 in maintenance from my ex pcm.

How much could we borrow? Thinking of around £200K (£50K deposit).

On a joint income of 80k pa, with 'debt' of £170pcm, even with a joint multiple of just 3x salary, you should get about £230k. A deposit of 50k also puts you in a decent position with regards to LTV (25% of £250k).

At, say the Woolwich (1o year fix at 5.23%), you would be paying c.£1600pcm over 15 years. If you wanted to pay over 25 years, this figure would be closer to £1200pcm.