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  • FIRST POST
    Dexter101
    Minimum requirements to get a mortgage
    • #1
    • 2nd Sep 10, 6:09 PM
    Minimum requirements to get a mortgage 2nd Sep 10 at 6:09 PM
    I currently live with my parents but would really like to move out, ideally by buying my own flat or house.

    I currently earn £11,400 gross, £14K net.
    I have around £12.5K in savings.

    Obviously not enough to buy a house.

    I'm crossing my fingers that I'll move up the ladder a bit in my current job in about 6 months where I think I'll have a salary will increase of ~3K. That's a maybe though.

    Alternatively if I have to stick with my current wage, how much more should I save before I could qualify for a mortgage.

    Is shared ownership worth looking at otherwise?
Page 1
    • eschaton
    • By eschaton 2nd Sep 10, 7:22 PM
    • 1,907 Posts
    • 1,662 Thanks
    eschaton
    • #2
    • 2nd Sep 10, 7:22 PM
    • #2
    • 2nd Sep 10, 7:22 PM
    I currently live with my parents but would really like to move out, ideally by buying my own flat or house.

    I currently earn £11,400 gross, £14K net.
    I have around £12.5K in savings.

    Obviously not enough to buy a house.

    I'm crossing my fingers that I'll move up the ladder a bit in my current job in about 6 months where I think I'll have a salary will increase of ~3K. That's a maybe though.

    Alternatively if I have to stick with my current wage, how much more should I save before I could qualify for a mortgage.

    Is shared ownership worth looking at otherwise?
    Originally posted by Dexter101

    If your earnings don't increase then I would suggest saving enough for a 90% deposit on a rabbit hutch and then borrowing the rest.
  • Dexter101
    • #3
    • 2nd Sep 10, 7:49 PM
    • #3
    • 2nd Sep 10, 7:49 PM
    Thanks.

    Anyone got any sensible answers just so we've got a good mixture?
    • zx81
    • By zx81 2nd Sep 10, 8:05 PM
    • 23,558 Posts
    • 26,166 Thanks
    zx81
    • #4
    • 2nd Sep 10, 8:05 PM
    • #4
    • 2nd Sep 10, 8:05 PM
    Thanks.

    Anyone got any sensible answers just so we've got a good mixture?
    Originally posted by Dexter101
    Nice comeback.

    Your chances are slim. How much is a likely property going to cost? Say a lender will give you 3 times salary - which is a lot these days - you're looking at around £42k plus your deposit. Will £54k buy you anything? Or is it £20k short or a £100k short? Then you can start to figure out your options and how long it might take you. An extra £3k salary may get you another £10 mortgage - is that enough?

    Don't know much about shared ownership but worth looking into. Or buying with a (long term) partner to increase the salary the mortgage is based on.

    If you're massively ambitious, buy a hole for £54k (if they'll still lend it to you), do it up Sarah Beeny style over time to make it nice enough to live in - or sell. But it's not for everyone. Certainly not me.

    For better advice than from a bloke on the internet, go and chat to a mortgage advisor. Even just the one at your local bank - you don't need to get the mortgage through him (and I'd recommend you don't) but would give you an idea of where you stand.

    Good luck with it.
    Last edited by zx81; 02-09-2010 at 8:10 PM.
    • eschaton
    • By eschaton 8th Sep 10, 9:35 PM
    • 1,907 Posts
    • 1,662 Thanks
    eschaton
    • #5
    • 8th Sep 10, 9:35 PM
    • #5
    • 8th Sep 10, 9:35 PM
    Thanks.

    Anyone got any sensible answers just so we've got a good mixture?
    Originally posted by Dexter101
    You can't really be sensible.

    In a job which based on full time hours earns you under £7 per hour and you want to buy a flat and all the associated living costs that go with it.

    You haven't really planned this out have you?

    If you have saved what you have from earnings then keep doing that.
  • Dexter101
    • #6
    • 27th Mar 11, 1:00 PM
    • #6
    • 27th Mar 11, 1:00 PM
    OK, I now have £16.5K in savings and my take-home salary is now £13K.

    Obviously I'm in a better position now but is it good enough?

    I've found a flat for £74K which looks suitable. As I now have over 20% to place a deposit, am I in a position to approach a mortgage lender or should I continue saving / try to increase my salary?
    • HappyMJ
    • By HappyMJ 27th Mar 11, 1:31 PM
    • 20,595 Posts
    • 17,201 Thanks
    HappyMJ
    • #7
    • 27th Mar 11, 1:31 PM
    • #7
    • 27th Mar 11, 1:31 PM
    OK, I now have £16.5K in savings and my take-home salary is now £13K.

    Obviously I'm in a better position now but is it good enough?

    I've found a flat for £74K which looks suitable. As I now have over 20% to place a deposit, am I in a position to approach a mortgage lender or should I continue saving / try to increase my salary?
    Originally posted by Dexter101
    The absolute most you could borrow is 4 times salary so £13k*4=£52k plus your £16.5k equals £68.5k so it still isn't enough to buy a house worth £74k. Really you should have about 25% of the house price as a deposit so that's about £20k. Don't forget you'll need to spend between 1% and 5% of the purchase price in fees and charges. Being on the limit on lending guidelines you'll be hit with interest rate penalties so it'll probably be more expensive than simply renting.

    I'd get a part time job in which you earn at least £200 per week. You'll be able to afford it then.
  • Blobby8
    • #8
    • 27th Mar 11, 1:42 PM
    • #8
    • 27th Mar 11, 1:42 PM
    Glad you got your rise !
    Have you considered all your other outgoings, council tax, fuel, TV licence, water rates, internet,insurance,communal charge(in a flat),food, shopping (bog rolls,condoms, etc) you are obviously young and I would hate to think your dash for freedom ended up in you living on beans.
    And I'd check your use of gross & nett too.
    Last edited by Blobby8; 27-03-2011 at 1:52 PM.
  • Dexter101
    • #9
    • 27th Mar 11, 2:13 PM
    • #9
    • 27th Mar 11, 2:13 PM
    Glad you got your rise !
    Have you considered all your other outgoings, council tax, fuel, TV licence, water rates, internet,insurance,communal charge(in a flat),food, shopping (bog rolls,condoms, etc)
    Originally posted by Blobby8
    I've had a look at whether I could afford that if I rented and I just about could so I imagine I would have similar outgoings if I bought.

    And I'd check your use of gross & nett too.
    Aye, I just noticed I got that the wrong way around in the OP.
    • **woody123**
    • By **woody123** 27th Mar 11, 2:51 PM
    • 537 Posts
    • 195 Thanks
    **woody123**
    Hi Dexter,

    I'm in a similar situation you are in, live with parents etc, same wage..

    I have a larger deposit 33k..

    I think its 3.1/2 or 4 times your gross salary you can lend so thats 68k..

    I'm looking to buy a house priced at around 85k and then put my deposit down. Looking at the total outgoings i've got all worked out, it's going to be tight so i've decided to wait a bit and save more and maybe house prices drop a little.

    I think you're best advice mate is to wait a while and save more money.

    In addition to the outgoings Blobby pointed out don't forget the unexpected repair bill or the holiday you might want.
    Last edited by **woody123**; 27-03-2011 at 2:58 PM.
  • Blobby8
    I've had a look at whether I could afford that if I rented and I just about could so I imagine I would have similar outgoings if I bought.
    Originally posted by Dexter101
    There are costs associated with owning property over and above renting costs. I really dont want to be a wet blanket, but I just think you need to do a lot more research.
    Maybe post a list here of what you think you may need to pay out each month.
    Dont forget mortgage rates are only going in one direction (IMHO) UP!
    • paint
    • By paint 27th Mar 11, 5:18 PM
    • 251 Posts
    • 128 Thanks
    paint
    You also need to make sure you're accounting for the costs of buying. I'm in the process of this myself, and it's costing me around £1,000 for the Solicitor / searches / other legal costs, plus £550 for a homebuyers' survey.

    Also, have you considered the costs of moving to your first home, including things like a bed, mattress, washing machine, fridge freezer, tumble dryer, sofa / chair, TV, other furniture; and also redecoration costs? If you have a look on Argos website it'll give you an idea of these costs.

    I'd recommend you give it another 12 months of hardcore saving. I don't think house prices are going to move.

    Good luck!

    I wouldn't touch shared-ownership with a barge-pole.
  • Blobby8

    I wouldn't touch shared-ownership with a barge-pole.
    Originally posted by paint
    Why on earth not ?
    The opportunity to maintain a % of a property that you dont own, heat it, decorate it, clean it, insure it, and pay for the privilige.
    • ViolaLass
    • By ViolaLass 27th Mar 11, 9:30 PM
    • 5,601 Posts
    • 7,728 Thanks
    ViolaLass

    I think its 3.1/2 or 4 times your gross salary you can lend so thats 68k..
    Originally posted by **woody123**
    Borrow! At least understand what it is you're trying to do!
  • Dexter101
    Thanks for all the replies, I still haven't bought but wondering what everyone thought of where I'm at now

    I have £22K. Unfortunately I'm still on £16K, I expect to pick up £14K with overtime considered.

    This is what I think my outgoings would be: (I could probably add a few more, I know)

    Code:
    Electric / Gas  £50.00
    Water           £8.00
    Internet        £15.00
    TV License      £12.00
    Food            £80.00
    Telephone       £15.00
    Maintenance     £75.00
    Car insurance   £25.00
    Car Tax         £5.00
    MOT             £30.00
    Car maintenance £40.00
    Petrol          £60.00
    Total           £415
    I had a look on Fool and entered my gross, deposit and outgoings and the result was "A provider may offer to lend you between: £33,060 and £46,835"

    I think I would be happy with something for £60K. A look on HSBC mortgages seems to suggest a 4% mortgage with repayments of £200 p/m.

    Seems doable to me, what does everyone else think?
    • chopper78
    • By chopper78 31st Oct 11, 11:11 PM
    • 179 Posts
    • 117 Thanks
    chopper78
    £60k doesn't buy much, so don't buy a house just for the sake of buying a house, otherwise you could potentially buy something you'll struggle to shift further down the line.
    • Suarez
    • By Suarez 1st Nov 11, 11:36 AM
    • 945 Posts
    • 613 Thanks
    Suarez

    I currently earn £11,400 gross, £14K net.
    I have around £12.5K in savings.
    Originally posted by Dexter101
    Do you mean 11,400 net? 14k Gross?
    • Thrugelmir
    • By Thrugelmir 1st Nov 11, 11:43 AM
    • 64,568 Posts
    • 57,052 Thanks
    Thrugelmir
    Seems doable to me, what does everyone else think?
    Originally posted by Dexter101
    Keep saving. You are doing extremely well.
    “If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. Money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.”
    ― Niall Ferguson
    • Suarez
    • By Suarez 1st Nov 11, 11:47 AM
    • 945 Posts
    • 613 Thanks
    Suarez
    Thanks for all the replies, I still haven't bought but wondering what everyone thought of where I'm at now

    I have £22K. Unfortunately I'm still on £16K, I expect to pick up £14K with overtime considered.
    Originally posted by Dexter101
    I think you could get a 50k Mortage so I would be looking at places around the 70/80k mark.

    Making offers of a maximum of 70k

    Arrange a chat with a mortgage broker
  • mondello
    Best thing to do it speak to your bank or an FA. the hardest part is going to be getting someone to agree to lend to you. I manage to pay my £73k mortgage on a salary of £16K. I was on a better salary when I took it out and unfortunately this has dropped due to redundancy. Once you have the mortgage it's doable providing you budget well and don't expect to buy all brand new furniture and the best of everything.

    Keep saving - well done for getting so much put away, it all helps.
    Sealed Pot Challenge 2012 Member # 1398 - Target £100.
    Sealed Pot total 2011 - £171.06

    VSP 2012 Member # 97

    'Don't breed or buy whilst animals in rescue centres die'
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