vallumlj

i am looking to buy my first home. I currently earn 28k basic plus 5 k comisson a year.

Problem is i have a 20k loan.

What sort of mortgage would be best for me to get and how much do you think i could get. Is there a way i could put the both together.

Thanks for the help.

davyboy

Financial advisers will love you!

I'm sure a mortgage company would help you....but you wont get particularly competitive rates, or an awful lot of flexibility. Is there anything you can sell to get rid of the 20k loan.

When you took out the loan for 20k....did you utter the great phrase "you only live once"........because there is another part to that, and it goes like this, "yeah, but you have the rest of your life to pay it off."

HTH

Dave

brumdaisy

In the old days lenders would only lend upto 3.5 times ur salayy without bonuses being taken into consideration but these days you can borrow upto around 5 times ur salary, which in my opinion is totally irresponsible.

Two tips:
1) work out how much you can afford to pay each month and do not let yourself be sold a mortgage that will cost you more than that - dont forget they earn more commission the more you borrow but you're the one who has to pay it back

2)mortgages have always been based on 25 years but there's nothing wrong with getting a mortgage over a 30 year period - because in reality most people get two or three year deals then change their mortgage after the deal expires. For example you take out a 30 year mortage now, with a 3 year discounted period, then after 3 years (assuming there are no tie ins) you change to another lender and maybe by this time you are earning more so instead of taking a 27 year mortgage out you only take a 22 year mortgage etc.....

Finally - ive searched around many times and always found alliance & leicester have the best deals especially for first time buyers

Petem95

A lot of places will decide how much you can borrow based on your available cash left each month after out-goings.

In the current climate theres a lot of competition between lenders, so you might still be able to borrow something silly like 4.5 times salary (so 126k). Theres a lot of repos at the moment as mainly FTB's cant keep up with the massive repayments, but for some reason the banks are still very slack on lending (for now anyway..)

Also you'll probably be able to get a 40-year mortgage. One of my mates has got one of these (hes one of these people who think property "only ever goes up in value" - clearly hes been watching too many property showed with a vested interest in talking up the market, and IMO hes going to learn an expensive lesson )

Edit: BTW Im assuming you have no savings if you have a 20k loan.... I cant really see how you'll be able to afford anything in that case with house prices currently being massively over-priced.

vallumlj

how about a norther rock together mortgage

MikeCardiff

iTrader: (2)

Also, when taking out the mortgage look at what will happen to your monthly payments once any fixed rate period has finished if the interest rates rise by 1%, 2%, 3% etc...

You may work out what you can afford now, but at the moment interest rates are low, and are only really likely to go up over the next 3 to 5 years - you could find your 'just affordable' mortgage will end up with payments that will cripple you if the interest rate goes up even a small amount.

Personally, I'd suggest waiting a year or more, chip away some of that loan and see what happens with house prices - its VERY unlikely they are going to go up at all in the next year, so I'll bet you'll be in a much better position to buy in 12 or 18 months time, and over 25 or 30 years you'll save a lot of money for the sake of just waiting a bit longer.

briforbes

PM me your details if you like and I'll do a quote for you tomorrow - I'm a broker.

Cheers,

Brian

paul-s

maybe so, but without the increased lending it is nigh on impossible for ftb's to get on the ladder.

Without ftb's how will the property chain move onwards and upwards ?! catch 22

Petem95

If only more people understood this!!!

This is exactly why property prices will fall. For prices to remain at these levels you need new money coming into the market.

That used comes from FTB's, but now theyre priced out the market. For a period BTL filled the gap, but that craze is now coming to an end as its not really viable anymore and there are far better investments now. Pensions have also poured yet more money into the market as people buy a property to rent instead of a pension, but again thats coming to an end.

Where will the money come from next?.... can only be from FTB's IMO, but we'll need to see big price falls before they return in big enough numbers.

briforbes

The common first step for FTB's now is to buy somewhere in need of rennovation, put a bit of time and effort into the property, and sell at a profit. This then allows them more choice financially. The likes of Northern Rock who offer FTB's up to 130% Loan to Value are specifically targeting this sector as they know people will likely want to spend more than the purchase price on decorating or home improvements.

davyboy

Of course as a financial advisor you don't have an interest is selling Northern Crock mortgages do you

I always like it when people who cant afford a house, say the market will crash....I guess if you KEEP saying it it might happen. But the chances are you'll earn more money and be able to afford one.

Mungo

I remember clearly a conversation with a friend in about 94/95 who said she was waiting for prices to settle a bit before buying. She could have had a 2 or 3 bedroom flat in Shepherd's Bush for £65k!! She still hasn't bought anywhere.
Sure there will be short-term fluctuations in the market, but in the medium-to-long term, prices will rise. Don't buy a house just to make a quick buck, buy it as a home and you should be happy.

stilover

Mortgage company will insist you pay off you loan first. When I got my first mortgage they insisted I pay off my car loan before they would lend me the money, even though I could comfortably pay both.

Seek profesional advise.

Some estate agents have financial advisers, mine did. It's usually free too.

briforbes

I'm totally independant so it makes no difference to me who I place business with. They are a good company though, easy to deal with and one of the few who offer good high LTV deals for new buyers. They're not without their bad points either (arrangement fees, long tie-ins, higher % rates for high ltv), but in terms of helping FTB's get a home - they are good.

Shouldn't do. If you state at the outset that you wish to consolidate debt it's added into the loan and repaid on completion. In your case perhaps the LTV would have been outwith their lending criteria at that time or for a particular deal hence them asking for it to be repaid first.

Petem95

It works both ways however, people who've bought want to kid themselves that this housing cycle will somehow be different to all previous ones, and instead of going up and down, it will just keep going up

One rather worrying thing for FTB's however is that the housing cycle tends to take about the same amount of time climbing to its peaks, as it does falling to its troughs - so if we hit the peak in this cycle in late 2004 (from the 1996 trough), then chances are prices will slowely fall until 2012....

davyboy

I need a bigger house, and have just bought one.......if the market crashes, I still have the hosue I want, not much I can do about it, but it would have to be one hell of a crash to put me in the red.

briforbes

There's always the self-build route?

davegtt

If you can afford the payments of the house then it doesnt matter what the value of the property is aslong as you dont intend on selling it anytime soon.

Property should be a long term investment, anyone worrying about house values etc when looking to buy to live there is a fool IMO.

Brit_in_Japan

Are there any redemption penalties for paying your loan off early? Depending on what interest rates the loan & mortgage are, you might be better off adding an extra 20k to your mortgage and paying the loan off straight away.

vallumlj

2 months interest so not much really.

any ideas how i could get a 160k mortgage and what the payments would be. would it be worth trying to get a 40 year one

Moonloops

pah Northern Rock are a bunch of sh1tting cúnty fúckmongers

fast bloke

You wont have to pay of the loan first, but it will usually be annualised and taken into account. (If the loan costs you 350 a month they will take 350 * 12 off your salary before applying income multiples)

160k on 28k a year is a big stretch, even without the loan. I would think that Accord would be your best bet, as they don't take personal loans into account, and will give you around 5 times salary if you go for a long term fixed rate (5 years)

briforbes

To borrow 160,000 over a 30 year period based on the details you've given in this thread, there are several lenders who would give you a mortgage, based on you putting down no deposit. A deposit would mean you could potentially get a better rate however.

Monthly payments vary from £907 pcm to £956 depending on the deal/lender. Over 40 years this would fall to around £750 pcm. You could potentially take out a mortgage based on the longer term, then when your scheme period ends and the LTV is hopefully better stacked in your favour due to you having paid off some of the mortgage and the value of the property having increased, drop the term down to pay it off sooner.

Hope this helps.

vallumlj

how about this scheme

Shared ownership

house worth 200k

i need to get a mortgage for 80k then i have to pay them 250 a month rent this does not sound to bad to me. After a year i can buy as much as i want.

what do u think

MikeCardiff

iTrader: (2)

Wouldnt bother with shared ownership schemes - most are aimed at people who are completely desperate.

TBH looking at your figures, if you earn £33K a year and have a £20K loan ( I assume its just you going for the mortgage as you havent mentioned any partners income ), you cant afford a house for £160K ( you may get a mortgage for it, but that isnt the same as being able to afford it ! ) - either look for something cheaper or wait until you earn more or have reduced the loan significantly.

paulg1979

iTrader: (1)

I'm a first time buyer and have just got a £152000 mortgage and repayments are going to be £881 fixed for the first 2 years and just over a thousand for another 23 years. Obviously I will look for a better deal in 2 years. I went on a first time buyer scheme where the housing development paid the first 5% so I only had to get a 95% mortgage. This was on a brand new develpoment (countryside properties) Really nice places.

hades

That depends on who, how much etc. I don't think it's totally irresponsible if it's 5* your basic salary, you have no dependents, you are just starting out and know your salary will rise a fair bit in the next few years, you get a fair chunk of overtime / commission and you get a fixed for a few years type deal. It is way OTT if you're 40 and will never again get much over inflation as a payrise, have no overtime / commission and have several other financial commitments.

As for the "looking at house values when you're going to live there" making you a fool, again, not always. I'm shortly going into short-term rented having sold my house, whilst I look for somewhere new nearer to my new job. I'm prepared to do this as I don't believe that house prices will rise rapidly in the next 6 months, and might just decline a bit (I hope). In the meantime, I'll be earning enough interest on my equity to cover the majority of the rent, so will not be losing on the deal. Similarly, timing when you leap on to the ladder to maximise the size of house you can sensibly afford is clearly a wise move!

As always, one of the few valid sweeping generalisations is that sweeping generalisations very rarely give a full and accurate picture.

fast bloke

shared ownership would be a last resort

hades

I admit that's a sweeping generalisation I find it hard to disagree with no matter how I slant my perspective!