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    • jharm
    • By jharm 9th Mar 18, 11:13 AM
    • 2Posts
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    jharm
    First time buyers - Help please!
    • #1
    • 9th Mar 18, 11:13 AM
    First time buyers - Help please! 9th Mar 18 at 11:13 AM
    Hi everyone,

    My partner and I are wanting to buy our first (and hopefully only) house within the next year. Obviously we've never done this before and quite a lot of it is going to take some getting used to - I'm slowly learning the jargon!

    First things first - We are looking to buy a house for 120,000 or at an absolute push, 130,000 maximum.

    I myself am out of work at the minute, my partner works full time and is earning 20,000 per year and has been in this job a year and five months.We are living with parents at the moment and do not have any outgoings other than car insurance of 75 per month, HP of 310 per month (due to be paid off September this year) and around 270 per month for fuel. We have a (albeit small) deposit of 6,000 which is 5% of the 120,000.

    Please bear with me, this is where the questions start coming in thick and fast!

    We are meeting with a mortgage adviser this month at our local building society and I guess I just kind of want to pre-empt what they may say?

    1. Is the fact that only one of us is working going to be a problem in terms of actually receiving the loan amount we want? And if so - how do single applicants manage to get such high mortgages?

    2. Is our deposit enough?

    3. Would it be better to get a mortgage broker?

    4. Based on calculations we have done, we could afford a 'step on' (no idea what this means) fixed rate repayment mortgage on a 5% deposit with an initial rate of 4.14 for two years, then up to 5.70% for the remaining term. My question is, if our finances say that we can afford this repayment with disposable income left over - will they base their lending on this and offer us this deal or do they still follow the salary multiplication rule?

    5. We have discussed which lenders we would feel comfortable with and we have been told by a few people that it is best to go with building societies as banks tend to lend you more than you can really afford, is this true or are we unnecessarily limiting our ability to lend?

    Any help would be appreciated as this can all be a bit overwhelming sometimes!
Page 1
    • dimbo61
    • By dimbo61 9th Mar 18, 11:22 AM
    • 9,878 Posts
    • 5,312 Thanks
    dimbo61
    • #2
    • 9th Mar 18, 11:22 AM
    • #2
    • 9th Mar 18, 11:22 AM
    Well first of all it does help if both of you are working.
    Your partner earns 20,000 a year so 4.5x 20,000 = 90,000
    Which is well short of the 114,000 you need.
    • juniordoc
    • By juniordoc 9th Mar 18, 11:30 AM
    • 364 Posts
    • 286 Thanks
    juniordoc
    • #3
    • 9th Mar 18, 11:30 AM
    • #3
    • 9th Mar 18, 11:30 AM
    I don't think you have much of a chance while you are not working.
    Are you actively seeking another job? What are the chances you will get one soon?
    Great news that you can live with pare ts for now and minimise your outgoings. You also need to save another couple if grand for solicitors and survey fees.
    • amnblog
    • By amnblog 9th Mar 18, 11:31 AM
    • 10,456 Posts
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    amnblog
    • #4
    • 9th Mar 18, 11:31 AM
    • #4
    • 9th Mar 18, 11:31 AM
    1. Is the fact that only one of us is working going to be a problem in terms of actually receiving the loan amount we want?

    Yes, there is not enough income.

    2. Is our deposit enough?

    Barely, perhaps you should look at Help to Buy Purchases

    3. Would it be better to get a mortgage broker?


    Definately

    4. Based on calculations we have done

    The Lender will make the calculations

    5. We have discussed which lenders we would feel comfortable with and we have been told by a few people that it is best to go with building societies as banks tend to lend you more than you can really afford, is this true or are we unnecessarily limiting our ability to lend?

    Nonsense, no-one will lend you more than you can 'afford'.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • ACG
    • By ACG 9th Mar 18, 11:33 AM
    • 16,816 Posts
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    ACG
    • #5
    • 9th Mar 18, 11:33 AM
    • #5
    • 9th Mar 18, 11:33 AM
    1) Realistically you are not going to get the size of mortgage you want based on an income of 20k - General rule of thumb is 4.5x income (so 90k in this instance) but the HP is going to reduce that, so you may need to wait a while with some lenders. Some lenders will ignore it as it has less than 6 months to run.

    2) Your deposit is fine. It meets the minimum needed to get a Mortgage - but obviously not enough when combined with your incomes for a 120k property.

    3) Probably. They can access 50-100 lenders rather than just the one you are visiting.

    4) It goes off what the lender says you can afford as they are putting a buffer in there for potential rate rises.

    5) Completely untrue. All lenders are regulated by one of the most regulated industries in the country. Lenders will tell you what they are prepared to lend, if you are not comfortable lending that amount then you can lend less. Although the irony in this post is that you want more than any lender will lend.

    Ive just read this post back and it reads a bit grumpy, I was aiming for straight to the point. I wont change it as I think the answers are valid but dont read it thinking im sat here judging and being a miserable sod.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • jharm
    • By jharm 9th Mar 18, 11:41 AM
    • 2 Posts
    • 0 Thanks
    jharm
    • #6
    • 9th Mar 18, 11:41 AM
    • #6
    • 9th Mar 18, 11:41 AM
    Thanks everyone,

    I think what is standing out here is the fact that we will not get the mortgage we want if I am not working. Just out of curiosity, how does it work with single applicants? I know someone that bought a 160k house and he was the only applicant - not moaning I'm just genuinely interested in how he managed to get such a high loan - what would happen if he lost his job?
    • ACG
    • By ACG 9th Mar 18, 11:50 AM
    • 16,816 Posts
    • 8,773 Thanks
    ACG
    • #7
    • 9th Mar 18, 11:50 AM
    • #7
    • 9th Mar 18, 11:50 AM
    Their income/deposit would have more.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • dimbo61
    • By dimbo61 9th Mar 18, 12:28 PM
    • 9,878 Posts
    • 5,312 Thanks
    dimbo61
    • #8
    • 9th Mar 18, 12:28 PM
    • #8
    • 9th Mar 18, 12:28 PM
    You live in a cheap part of the country if you can buy a house for 120/130K
    So that's good.
    You need to save, save, save.
    If you can get a 10% deposit all the better.
    Can Mum and Dad help with deposit or Barclays Family mortgage !
    Parents need to have 10% of the purchase price to keep in a Barclays savings account for 2/3 years.
    You can get a 95% or even 100% mortgage but you need to Earn enough Income.
    • stripedbanana
    • By stripedbanana 9th Mar 18, 2:29 PM
    • 26 Posts
    • 4 Thanks
    stripedbanana
    • #9
    • 9th Mar 18, 2:29 PM
    • #9
    • 9th Mar 18, 2:29 PM
    Single applicants may get more than a couple with one income because many lenders will consider you a financial dependent, reducing the affordability in their eyes.
    • paddyandstumpy
    • By paddyandstumpy 9th Mar 18, 3:27 PM
    • 1,031 Posts
    • 509 Thanks
    paddyandstumpy
    If you can save to get to 10% deposit, you may find far better options open up.

    We've just been accepted with Nationwide based on a 4.75x multiplier with our combined incomes. We have a 10% deposit and have a rate of 1.89% on a 2 year fix. That rate of 4.14% made me wince!
    • cashbackproblems
    • By cashbackproblems 10th Mar 18, 2:07 AM
    • 1,747 Posts
    • 682 Thanks
    cashbackproblems
    what does it matter what other people borrowed, maybe their income and deposit amount was much higher as mentioned. I borrowed 255k as a single applicant
    Looking at your situation you are well short for a 120k house. Ideally you need 20k in cash to cover the deposit, all the fees and some furniture but as mentioned you won't be able to borrow more than 90k. Why not just get a job and stop sponging from your partner, save for 6-12 months then you will be in a much better position
    • Novice investor101
    • By Novice investor101 10th Mar 18, 10:38 AM
    • 131 Posts
    • 69 Thanks
    Novice investor101
    I bought my first house 5 years ago as a single applicant earning 21000 a year, at age 31.
    I paid 100,000 for the house & had a 25% deposit. I only managed this as I (by sheer luck) bought at the bottom of the last slump & had saved, saved, saved for about 10 years (& had a personal injury claim payout from my employer after a serious accident at work).
    I started with 50k in savings and by the time I'd paid the deposit, surveys, fees, solicitors etc & then building work & furniture, I had about 7k left.
    All this was well in budget.
    A high deposit meant I could get a good mortgage deal & and also that I could afford to quit a terrible job & start again in a much better one.

    You need to prioritize saving for a deposit & costs. Unfortunately, 6k will not get you far & houses are now much more expensive. Identical houses on my street & nearby are up for nearer 130k these days.
    Last edited by Novice investor101; 10-03-2018 at 10:40 AM. Reason: Got my age wrong!!
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