pimmo2000

iTrader: (6)

My g/f and I want to buy a flat we've found costing £130,000... well listed for £130,000 anyway.. the problem is we need 100% mortgage and we dont quite earn mega bucks yet!!

Without going into too much detail we're both Uni grads and are starting out in our chosen fields... So yes crap pay... together we earn about £30k without bonus's etc

Is there any chance at all anyone is gonna give us this mortage??

I've worked out average on a few mortgage calculators that £130,000 over 35 years including interest is arond £600 a month. We can afford £900 going on our current renting situation.

I know it depends on credit scores and such but is there any chance?

Petem95

Thats only 4.33 times your joint salaries, and you'll be earning more in future. Banks and BS's are falling over themselves to lend out crazy amounts at the moment, so you should have no problem at all borrowing that amount.

Mrfastbaz

have you thought about an interest only mortgage. although at the moment you would not be paying any of the capital borrowed back at least your repayment swould be lower and in a couple of years or so when your wages have gone up you could swop for a repayment ...

pimmo2000

iTrader: (6)

to be honest guys I dont know where to start.. my dad thinks banks charge loads any tips or suggestions ?

Petem95

Well honestly I would rent for a bit, save a deposit and there's a good chance prices will be lower buy the time you come to buy. You could well be buying at the top of the biggest property bubble in history right now. On the other hand if you want to buy anyway try looking on sites like Financial News, City News, Mortgages, Loans, Savings, Pensions, Market Reports | This is Money for some advice and also Credit Card, Mortgage, Loan & Saving Account Comparisons from Moneyfacts.co.uk to compare rates etc.

pimmo2000

iTrader: (6)

thanks, I'm paying 6000 a year in rent right now !! I cant afford to save

pimmo2000

iTrader: (6)

all I get from online tests is

The income you have specified is not enough for the mortgage amount you have requested

pimmo2000

iTrader: (6)

Any thoughts?

briforbes

Royal Bank of Scotland base their lending exclusively on "affordability" at the moment....i.e. rather than saying they'll lend you x amount times your income, they look at your outgoings and decide what you can afford.

e.g. John may earn 40k per year but have lots of loans etc so can technically only 'afford' a small mortgage, whereas Mark earns 20k per year but has no outgoings so can 'afford' a larger mortgage than John.

If you'd like more info on what might be available to you, PM me.

bighead

iTrader: (1)

go to a Financial advisor.....he/she will work out what best for you .

you can get a mortage that is not dependent on yr income (i.e. no need to disclose what you earn per year ), but you need atleast 15% deposite
try borrowing from friends/family for the deposite
hope this info helps .

bighead

iTrader: (1)

ps get rid of the scooby ...then you can afford a mortage

pimmo2000

iTrader: (6)

My Scooby is in hiding at the mo, she's not well and my insurance costs too bloody much

bighead

iTrader: (1)

That is exactly why you can't save for a deposite lol

pimmo2000

iTrader: (6)

you following me around the board

bighead

iTrader: (1)

nah just bored

pimmo2000

iTrader: (6)

try this

Line Rider, complete with Undo!

***Nemesis***

Don't waste your time with online quotes. If you are not completely standard you won't get anywhere ( bit like car insurance and modified cars...

You need to speak to a decent independent mortgage broker who will be able to give you proper advice and get the best deal for you. A two minute conversation will ascertain whether you will get a deal.

Many brokers don't charge fees but are paid commision by the mortgages providers.

MattN

are you enetring your details correctly?????

I just went to moneysupermarke.com and entered the following

House price 130k
Deposit 0
Joint application
salary = 15k for each applicant

Got loads of results. Fixed rate about £740pcm

flat4

i got a independant mortgage advisor to sort mine out, he/she comes to you and go through every possible senario and find the best deal for you, all they do is take a commission from the building society you eventually go with. The online quotes are a waste of time

flat4

...or what Nemesis just said

hades

Some lenders will go up to 5* salary these days, you may have a better chance being a graduate as most people know that graduates often get decent payrises in the first few years of their career. Abbey I believe will go to 5* on some deals, Northern Rock will often go quite high, and IIRC Yorkshhire BS will do fairly good multipliers as long as you take a 5 year fixed deal (i.e. they're trying to make sure the deal remains affordable for you even if intererest rates go up). So those are the three I'd try speaking to. You might still find that a lot of them require a 5% deposit, however, and unless you get a cashback mortgage, you have to factor in costs of moving such as solictiors fees, search fees, stamp duty etc (stamp duty dependant on how much you pay, IIRC you're near the 0%/1% threshold)

However, most lenders do take into account any other debts, so if you have regular payments to make on e.g. a car loan, student loan, and balance on store cards etc or similar, you probably are out of luck.

However, if you can't afford to save anything on £6k a year (i.e. £500 a month), that seems a bit inconsistent with "I can afford £900/month on a mortgage". Without knowing details, I can't really comment, but can you really afford to buy with your current salary, especially considering interest rates are on their way up at the moment?

The option of course is that if you can afford £900/month, put £400/month aside, you'll get your 5% deposit in about 18 months, by which time I assume you'll have had a couple of payrises and be able to get a better mortgage. House prices are unlikely to go up massively in that period, they may well increase a bit, although others on here are telling you that they'll crash and you'll get a 6 bedroom mansion for your £130,000 by this time next year. Saving cash in other ways (chopping in the scoob for a small cheap to run car for instance) will accelerate the saving for a deposit process noticably, selling the scoob might get you a decent chunk of the deposit.

Try for it by all means, and hopefully something I've given you might be useful, but I suspect you might miss this flat and have to look again in 12-18 months when you can actually afford to move - and when starting out (and probably until you're 50 to be honest!), you have to accept that there will be other sacrifices if you want to get on the housing ladder. It isn't an automatic right of someone to own their own home - most of our great grandparents and many of grandparents didn't - it is an expensive thing to do, these days it won't be easy.

pimmo2000

iTrader: (6)

Its not quite as black and white as that though is it... other money issues and loans coming to an end etc.. my g/f is an accountant... trainee given but she's done a plan for us and for the bank, listing everything in detail and what its for. Using our basic pay and making no assumptions.

I mean we need help, thats why I started this thread the people on here have been great! and I thank you. Least now I know I have some hope

Monkeybone

If it's a first place and you won't be there more than a couple of years do not bother with a full repayment mortgage!! Interest only all the way.

Interest only mortgages are perfect for ftbs for houses where you'll only be there short term.

For about 140k mortgage the difference between interest only and full repayment is something like 200-250 quid pm. I just ran it though a calculator, repayment at 4.89% is £809 pm, interest only is £570 for 140k. (I've used 140k as an example as I've just gone through all this )

In the first 5 years your monthly payents pay dick all of your capital off, it's all offset so you pay most of the interest up front. Last time i looked in the first few years on 140 youd pay off something like £800-1000 a year off the capital borrowed.

Instead, stick that extra cash into an isa/anywhere else, and at the end of the year you have 3k. You're already 2k up. Plus factor in the increase in the value of your home (long term this will always go up) and you'll be paying the capital off when you move and have more left over.

chocolate_o_brian

iTrader: (22)

ditto the above. sounds silly, but im on a 40 year mortgage at the moment, as i bought my house when i was only 20, and only on 15k a year wages. its costing me £400 a month, but most of that is interest, as i recieved the yearly statement a few months back, and had literally paid off a few quid on the actual mortgage amount!

and before people ask, yes i am looking at remortgaging, with my girlfriend, onto a 25 year mortgage, as i know i dont have the best deal at the moment...

incidently, the mortgage i got was 5 x's my annual wages and that was back in april 2005, when i bought the house...

with the equity i have now built up, when i do remortgage il take out a larger amount with the missus and try pay off most debts ie loans, credit card etc, and have one major payment a month (the moregage)...

for the guy that asked, what i did when looking at buying my house, was speak to several mortgage advisors in different banks, like hsbc, lloyds tsb, halifax... and thats how i ended up deciding who to go with. i do, however, personally believe in speaking to an independant mortgage advisor, as obviously the banks are gonna try sell you their product, and twist it into being the best thing since sliced bread...

i wouldnt personally go as an interest only mortgage, to me basically it sounds like paying rent, if you follow how i mean it.

good luck anyways...

andy

B9GLY

Hi, you will get enough money if you go with northern rock! they were great for me and gave me thousend more than anyone else!! they were also giving 1000 cashback that payed for the solicitors fees!!

as an example, there online calculator said they would give me £65000 approx! i actually got 100k off them when they took my details!

good luck

paul-s

remember if your over 90% or 95% loan to value you'll be incurring a Higher Lending Charge which can be a few grand and would be added to the loan as well.

B9GLY

i didnt and i actually borrowed more than 100% LTV

MattN

Not always - plenty of deals where there is no HLC.

Also regarding interest only. All depends on your situation but paying something off is better than paying nothing off. You may being paying a small amount of capital off in the early stages, but, you have to start paying it from somewhere.

I always had the opinion even if it only repaid a few thousand at least if the property value remained the same the lon settlement would be less so tha's the estate agent fee's covered when selling.

AudiLover

damn these Uni grads aint makin much money at all these days when they first start working do they.

My 17yr old brother and his GF make 45k combined and they are both still in training!

But like people have said banks love young professionals and you will be making much more money in the future.

What did you guys study out of curiousity

Monkeybone

Then save the difference between an interest only and repayment each month like I said above and make overpayments whilst on an interest only mortgage. You'll pay more of the capital off this way than if you had a repayment mortgage

Our mortgage allows 10% per year overpayments which is fine as couldn't do any more and that pays off way more than a repayment mortgage would.

If you're a trainee accountant for instance and not in the city then tbh 15k a year is what I'd expect them to get. Of course this'll ramp up once qualified quite a lot.

I've got a friend who did law while I was at uni, I've been on a higher salary than him for ages but as soon as he's fully qualified it'll shoot up.