Mortgage help please

dmitch071

Hi All,

I currently have a shared ownership mortgage but I am now looking at buying on open market. I have been offered a family freinds house for 290,000 and was valued at 345,000. Obviously this is a large amount so dont no what the possibilitys are.

I have 14,000 worth of debt which I pay on time every month. I do have a 80,000 deposit and I earn 30,000 with possibilities of overtime taking me over 50,000 and my girlfreind earns 17,400. We currently have a mortgage of 64,000 which we would be getting rid of. Is there any chance of me getting a mortgage for this amount. My parents said they will gaurentee if need be but i would rather not do this.

Cheers in advance
Dave

drbeat

dmitch071 wrote: »

I have 14,000 worth of debt

dmitch071 wrote: »

I do have a 80,000 deposit

Makes no sense!

dmitch071

sorry the debt is from my past but I have only just inherited the 80,000 so need to work out whether to put all the cash towards the house or clear debts it depends on what i need to get the mortgage. The repayments of the debt causes me no issues at the moment.

Thanks
Dave

drbeat

Apart from the fact that you're paying interest to a lender on that debt. This is a no-brainer! Get rid of the debt! The building society/bank will take that debt into account when deciding what to lend you.

dimbo61

you have told us you have a £64k mortgage on a shared ownership property
but you have failed to mention if you have any equity in this property !
Clear your debts £14k and if allowed pay off your mortgage.
You cannot afford a £200k + mortgage if your income is £30k
IF you have a large amount of equity in your present property then you might
be able to buy a bigger property or buy the rest of the shared owenership
in your present home.
Please consider carefully and dont take on too much debt.

dmitch071

thanks for the replys,

I have 7,400 that I put down for deposit on my current house and the other shared ownership propertys are selling at a value that would mean I have just over 20k in my current property. I have counted this in my current deposit.

How much would I need to earn to be considered for this value of mortgage as I can do reserved hours in my job which means they contract me into additional hours so my basic is increased to reflect this.

I relise the other possibilities for housing, but this house is next to my parents and my dad is now blind and mum is getting older so would love to be just next door to help.

Thanks Again

drbeat

dmitch071 wrote: »

I relise the other possibilities for housing, but this house is next to my parents and my dad is now blind and mum is getting older so would love to be just next door to help.

Yes I can understand now why want this house and I think it's admirable that you want to help your parents...but you really have to consider the financial realities of the situation.

The market isn't really in good shape at the moment and neither is the economy. House prices are somewhat unstable and your job may go belly up at some point. You have to think about whether you can still pay a 200k mortgage if you or your missus are out of work - you need sufficient liquidity to cover all outcomes such has interest rate hikes when your fixed term ends! Also are you ready to burden your parents with the reality of paying YOUR mortgage if you cannot pay it? If they have limited financial liquidity then their house will be at risk if they guarantee your mortgage. My mum and dad own their own property and have in the past offered to guarantee mortgages for me - I have refused their offers as I do not want what they've worked hard for put on the line because their youngest son wasn't switched on enough to buy a property when prices were ok.

If I were you I would:

Pay off your debts
Pay off your shared mortgage
Stay put and pay the John Prescott Association their rent as this will be a lot less then full rent
Bank the rest of your inheritence or look into purchasing the HA share of your current house

and then sit back and consider how fortunate you are!

Please don't allow external pressures to saddle you with 200k of debt! Seriously, it'll drive you into depression if things go belly up!

drbeat

dmitch071 wrote: »

How much would I need to earn to be considered for this value of mortgage as I can do reserved hours in my job which means they contract me into additional hours so my basic is increased to reflect this.
Thanks Again

I'd watch this reserved hours lark - I too had that facility and it has now been withdrawn due to external financial issues.

You earn 30k and thats it - stick to that when budgeting. Or find another job that pays 50k.

Conrad

dmitch

You need to talk to an independant broker with lots of experience. There are many many questions that need answering, for example; you say you can earn £50,000 but a lender would want your employer to categorically confirm this and see the exact wording they will use. Furthermore your credit histories and current debts will need to be taken into account.

I suspect you will be able to get the mortgage, but you need to consider if it's going to be affordable.

You say the property is worth much more than you are paying for it - I hear this every day, but's it's never the case. Sellers tend to have a vastly over inlfated idea of value. It's worth what the current crop of buyers will pay and there are vastly less buyers around now so forget any valuations they had done even just 3 months ago

Good luck

dmitch071

cheers for the advice, im lucky with my job im a gas engineer and huge demand for the organisation means the only way i will be laid off is if i done something really stupid. There is always overtime and could easily up my salary to 50k if i wanted but this is overtime which I no wouldnt be counted.

I relise im fortunate, im 25 have all I want and live a comftable life. I have a 6 month daughter and we have a 2 bed flat with no garden, and I want to get in a house I will call home for many years possibly life.

How the hell to people do it!!!!

I would say im in a good position and the house is valued at 345000 and would be paying 290000. Would the market drop that much anyway as the area has huge demand.

With my current mortgage and outgoings i pay 1100 just on loans and mortgage. I have been quoted 1580 repayment over 30 years.

So confused as im sure I wont get a chance like this again.

I have also looked into a uni lodger as there was a leaflet posted through mums door and this is £400 a month paid by uni, so this would take me to my normal outcomes.

Please dont think im set on getting this place and i just want you to tell me to have it, but this is the biggest commitmant i will ever make and also the best possible chance i will have.

Let me tell you about my local area and the way I look at it, A 2 bed flat that I live in now has a ful marked value of 240,000 and in guildford you get very little for around the 200k mark. Now with my deposit I will be paying less than a flat in guildford for a 3 bed house with huge garden, planning permision to extend and probally the nicest estate in guildford with the best primary school in Guildford and excellent schools all around it. The area is very sought after and it would be us set for life.

I see the risks but worse case scenario we sell and get something smaller. I see my job as more stable than most, my worry is the intrest rates rising after my fixed term. But im sure these are risks for most people but im fortunate that for my age I have a fair bit of money in the house which would hopefully be a bit of a buffer.

My collegues have mortgages in excess of 380k with some having 4 kids and they manage to survive go on holiday and have decent cars obviuosly I dont no the stresses behind closed doors!!!

cheers everyone sorry for long post just trying to calculate the risks against the position im in as I cant live where i am currently for life.

Dave

dmitch071

cheers conrad appreciate your point, a house on the same road (4 houses down) has recently all gone through at 310,000 and needed completly gutting out. As said before im not concerend about value as its where i will be for a very very long time, it was more for the mortgages companys view I was concerned.

Dave