stupid mortgage questions!

LilacPixie

Sorry ladies and gents for my stupidity but i have another couple of stupid and probably blatently obvious mortgage questions.

Firstly we currently live in a flat. I bought it alone in 2003 for 27k in 2005 with a 90% ltv fixed rate was up so i switched deals and took 5k of equity out the flat to marry my now husband keeping LTV at 90%. The mortgage is still in my sole name. There is around 27k outstanding i'm guessing as we were making some significant overpayments but 2008 statement not in yet for exact figures.

We are wanting to move to a larger home mid 2010 to give us time to clear all unsecured debt and build up a deposit to add to equity. Question is what will we be moving home or first time buyers?? Does it make a diffrence anyway??

Silly question number 2. I am both employed and self employed. I do have full accounts for 2 years at the moment and will have another 1-2 years before we apply for a new mortgage. Will this matter?? Will they add my PAYE and SE income together to make a total or only count PAYE income?? If itmakes any diffrence my PAYE income alone makesme the major wage earner.

bankersmug

LilacPixie wrote: »

Sorry ladies and gents for my stupidity but i have another couple of stupid and probably blatently obvious mortgage questions.

Firstly we currently live in a flat. I bought it alone in 2003 for 27k in 2005 with a 90% ltv fixed rate was up so i switched deals and took 5k of equity out the flat to marry my now husband keeping LTV at 90%. The mortgage is still in my sole name. There is around 27k outstanding i'm guessing as we were making some significant overpayments but 2008 statement not in yet for exact figures.

We are wanting to move to a larger home mid 2010 to give us time to clear all unsecured debt and build up a deposit to add to equity. Question is what will we be moving home or first time buyers?? Does it make a diffrence anyway??

Silly question number 2. I am both employed and self employed. I do have full accounts for 2 years at the moment and will have another 1-2 years before we apply for a new mortgage. Will this matter?? Will they add my PAYE and SE income together to make a total or only count PAYE income?? If itmakes any diffrence my PAYE income alone makesme the major wage earner.

I'm both employed and self-employed too, and they added both incomes together and counted them as one. I had to present accounts and my P60.

Bear in mind they are likely to use the net figure on your Self employed earnings.
Hope this helps.

dimbo61

First good luck with baby pixie ! not sure of the name what about trixie, tinkerbell, peaches !
you are not FTB,s as you already own a property and have a history of paying a mortgage and this is good.
try and build up some savings in ISA,s before the baby is due for emergencies.
The more equity you build up in your flat then the bigger deposit and
therefore the smaller the mortgage so carry on with the overpayments
if you can.
Keep good records of your income and tax paid as this will help when
you apply for a bigger mortgage.
GOOD LUCK

herbiesjp

You are not asking silly questions at all

If you don't know the answer then just fire away.. we tend to be friendly and helpful on here (despite some occasional heated thread lol)

1) You will be classed as homemovers or next time buyers, as you already own a property, which you will then sell to buy a new one. It really does not make that much difference to you in terms of deals either

2) Some will add the two together - other lenders may only take a certain percentage of the second income into account i.e. 50% 75% etc

If you can give some figures, then we may be able to give you an idea of how realistic your chances are i.e. what purchase price are you looking at? what deposit will you put down? What are your two PAYE incomes, what has been the NET profit for the SE income for the last 2 years?

rdsmortgageman

You won't be classed as FTB as you already have a mortgage. Make sure you keep up to date with current mortgage and all unsecured credit.

Some standard schemes will take all of your income into account, others will take a percentage of second income. Self cert schemes will take 100% of all income, but you want to try and avoid these if possible.

herbiesjp

Doh! deja vu!

LilacPixie

some figures for ya. I earn 23k (£23078 on p60 ending april 08) s/e income is £2378 net for the year ending april 08 and was just over 2k the previous year. DH earns 16k basic and anything up to 8k bonus which we don't rely on of count but it will show in his p60.

As for deposit and purchase price well how long is a peice of string. I had a little look at property guide last night a similar flats in poorer areas (IMO) are o/o 65k and they do seem to be moving at the moment. In addition to any equity we will easy have 5k+ cash.

Price of new property depends on what happens with any 'crash' 3-4 bed semi's in areas we like are between 130k and 150k. Less if it needs work.

I personally don't feel comfortable with having any less than a 10% deposit but ideally I would want more. I will only move when the numbers are right because I want to be able to enjoy our new home without needing to be working all hours to pay for it. 100% mortgages are not for us i'm afraid.

herbiesjp

Just based on the two basic salaries you should be fine, even looking at the higher £150k mark

Obvioulsy the s/e income and the bonus will only improve your affordability

You are right to look at a 10% deposit in order to keep as many options open to you as possible

LilacPixie

Thanks herbiesjp. That means we are on roughly the right track now to keep plowing into or unsecured stupid debt so we are in the best possible position to buy elsewhere when the time is right.