Financial / Mortgage advice

VTR

VTR

VTR

Soldato
Joined
29 Oct 2002
Posts
4,273
Location
South Wales
Looking for some advice regarding a mortgage basically...

My basic wage is 19k but effectively 24k as I do on call every month (guessing the basic rate is all that will apply for mortgage applications though?) - what sort of mortgage could I get on this wage. Are we looking at 3x so around 60k? Is a 10% deposit still needed?

I've got 13k finanaced on a car (Corsa VXR) - I'm guessing this will go against what I can borrow overall. Affording the mortgage wont be a problem as I currently pay 450 a month renting, I have a 2nd income from poker each month of around 1k but obviously this wont be able to go towards anything although it does mean I know I can afford it.

I'm moving out back home this weekend and going to start saving for my deposit, thinking of selling the car too and putting the extra 300 a month from that into the savings. So basically with a 10k deposit would I be looking for houses in the region of 70k? And will selling the car help me out in obtaining the mortgage (obviously the 300/month extra will be a nice bit extra to save but I'm more concerned about it effecting getting the mortgage - I'm guessing current "debt" goes towards the decision.)

Thanks all :)
 
I really can't see how you can buy a house and finance a £13,000 car on 19k a year single income (Infact I'd question whether you can buy a house on £19k). On-call allowance and poker winnings are not guaranteed so you'd have to be absolutely bonkers to base any sort of financial commitment on money from either of those sources. Don't forget also that interest rates are currently at an all time low and this is not a sustainable position. It's a question of when the interest rates go up not if. You therefore need to make sure your basic finances are resilient enough to cope with the interest rate returning to more normal levels.

Buying a house is expensive. My personal view, and of course its just that, personal opinion, is that buying your house should wait until you have a significantly better basic salary or you meet somebody you want to spend the rest of her life with and can use her earnings for your mortgage as well :)
 
Cheers for that Fox, the 24k *is* my basic wage pretty much, the on call is permenant as we do 2 weeks on 2 off for I.T support for out of ours social workers for looked after children (social services) but I suspect, as you say, this wont count towards anything mortgage wise as they just look at your flat basic rate.

Poker money has been steady for the past year now pretty much but again obviously on paper counts towards nothing. Realistcally I'll have to get rid of the car in order not to have any debt when looking to get a mortgage. (although I could effectively afford it it would go against on paper what I could borrow)

Using that calculator with 19200 basic and 4800 extra I get -

The amount you could borrow is up to:
£105,984

Doubt I'd get anywhere near that!? :p

Hopefully going to save up a 10% deposit - is that what's required these days?


edit - did meet someone who I was looking to spend the rest of my life with, we ended up renting 18 months ago but that didn't quite go to plan hence me moving back home now and saving up! Not sure how long I can face being at home after the independance for so long!
 
Run you affordability figures based on an interest rate of 10% as well to see how resilient your plans are to future interest rate rises. Remember, a mortgage is a 25+ year commitment, so future interest rates DO matter!

You need to make sure you are not screwed if interest rates go back up, lots of people are currently making the assumption that they can afford to buy a house now because they can just about afford to make the payments at current interest rates (And your Poker cannot count - as it isnt a guranteed income source).
 
Forget it with your current situation, imho. You might manage it once the deposit is saved and with the car gone.

Your net including overtime is around £1450-1500, the overtime will generally be counted as long as you can show 6+months of consistent earnings, and you can show a decent P11d. Forget the poker income completely.

You are committed to £300/month with the car, so your earnings are in effect that of somebody on approx £18.5-£19k. Work your figures from this. I'd imagine you may be able to borrow in the region of around £60-70k.
 
Well at the moment I've had the car 6 months at 300/month and been renting for 450/month - been on a few trips away aswell as Magaluf in the summer and haven't struggled :) So 750/month would equate to a 70k mortgage at 12% according to -

http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

This is taking into account my other earnings though obviously as that is how I have been living the past 6 months(with the car). My question is more really, what are the current mortgage requirements? Is it roughly 3 x wage + 10% deposit. I'm going to need 6 months - 1 year either way to get the deposit and probably get rid of the car.
 
Jez said:
Forget it with your current situation, imho. You might manage it once the deposit is saved and with the car gone.

Your net including overtime is around £1450-1500, the overtime will generally be counted as long as you can show 6+months of consistent earnings, and you can show a decent P11d. Forget the poker income completely.

You are committed to £300/month with the car, so your earnings are in effect that of somebody on approx £18.5-£19k. Work your figures from this. I'd imagine you may be able to borrow in the region of around £60-70k.
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Cheers for that, yeah net earnings are usually 1600-1700 and have been the last year as due to mileage and odd bit of overtime. Car will have to go if I'm going to look seriously at a mortgage.
 
Your basic take home pay is £1250 a month (£1500 if we count your oncall stuff but unless that is contractually set in stone and can never be taken away you cannot count that when you do your maths).

If you pay a £750 a month mortgage you have £500 a month left to pay for:

Food
Council Tax
Buildings Insurance
Savings for unexpected expenses on the house that insurance doesnt cover
Utility Bills
Savings for general purposes
Car insurance
Car running costs
Savings for car repairs if you've not got a nearly new car anymore

etc etc.

Thats before you even consider the amount of money you'd have to spend on the cool things in life.

And thats at 0.5% base rate. It wont be 0.5% base rate for ever. It will go up. And if it does, you have precious little reserves to absorb potentially large increases in mortgage costs.

I cannot see how this affordable, at all. I think you may need to just accept that you don't earn enough reliable money to buy a house yet. Don't worry - you will do one day. Until then feel free to continue renting and don't let the British attitude to house ownership make you think this is a substandard way of living. It isn't. Many European countries have nothing like the house ownership percentage of the UK.

Assuming you bin your car, your holidays, etc etc you look like you'll be taking a huge downgrade in terms of quality of life. Is it worth it at this stage for you? It's pointless being miserable all the time but thinking 'But!! IVE GOT A MORTGAGE!!'. There is nothing wrong with renting a house!

Wait until you can easily afford it and you'll enjoy the process a lot more.
 
Jez said:
You are earning more than you have stated if that is the case :) With what you have quoted you should be seeing around 1450-1500 net.
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Yeah the extra is for mileage though and the odd bit of overtime, I dont really take the mileage into account as that just goes on petrol for the car anyway. 1500 is my net garunteed each month, which I worked out to be around 24k. :)
 
VTR said:
Is it roughly 3 x wage + 10% deposit. I'm going to need 6 months - 1 year either way to get the deposit and probably get rid of the car.
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The best bet is to play with a comparison site such as moneysupermarket. You'll get a very good idea of lender affordability criterion from them.

10% is a bit of a low aim really, you'll end up with a fairly bad deal at that kind of LTV. As i say, have a play with a comparison site.
 
[TW]Fox;17845003 said:
Your basic take home pay is £1250 a month (£1500 if we count your oncall stuff but unless that is contractually set in stone and can never be taken away you cannot count that when you do your maths).
Click to expand...

Yes this is set in stone and in my contract, can't be taken away. In the past they have added it as basic salary for people but for some reason they add it now into our pay as "call out" and "standby" but it is effectively my basic wage.
 
Ok, so adjust my £500 to £750 and I think the point still stands.

If you genuinelly think you can afford all the living and running costs of owning a property with the £750 left over then by all means go for it but please do run figures for various interest rate scenarios. You dont want to be left stuck in an unaffordable mortgage in 3-4 years time!
 
[TW]Fox;17845037 said:
Ok, so adjust my £500 to £750 and I think the point still stands.

If you genuinelly think you can afford all the living and running costs of owning a property with the £750 left over then by all means go for it but please do run figures for various interest rate scenarios. You dont want to be left stuck in an unaffordable mortgage in 3-4 years time!
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750/month was based on a 70k mortgage at 10%.

At current rates it's around 400-450/month.

Which I think would be more than affordable but your right at 750/month it's going to be pushing it (without taking into account other income)

May need to save up more than the 10% as Jez says. I'll try out a few comparison sites now.

Nevermind, the time back at home saving I've decided to get back into bodybuilding properly, give me something to concentrate on rather than wasting money! :)
 
Ouch going to have to take a bit of a hit on the car too.

13k owing, 09 plate with 8k on the clock (bought with 2k 6 months back). Arden blue with 18" wheels and light and sight pack. Having a look on pistonheads I'll probably be lucky with 12k.
 
Jez said:
Lesson in that, dont buy pants cars on finance :p
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haha maybe :p

TBH I think it's a really good car, happy with it and I would keep it BUT I can see it depreciating hell of a lot more in the next few years though looking at the 07 plate ones! And this is coming from someone who has had less "pants" cars previously (JDM Bugeye STi Scooby, EvoII) and also drive a lot of other cars, performance or otherwise (comes from my old man, he's a panel beater by trade and got a thing for cars, from old 911 RS replica's he's restored from the shell to Skylines, Evo's, Focus RS's etc and I've been lucky to drive most of them)

Problem is they started doing the VXR's on lease deals cheaper than the finance deals and the prices seem to be dropping rather quickly on used models :\
 
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