Mortgages - how much to borrow

NotAGolf

NotAGolf

NotAGolf

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I'm looking to get a house at some point this year with the girlfriend. Been saving up for a while now and she's finally got a perm job in the area so in a couple of months we will be ready to start looking.

I'm trying to do some research as to what the likely amount to borrow would be but results seem to vary a fair amount. Moneysupermarket seems to be quite optimistic in that even with a tiny deposit and and expensive house it still gives you offers. Going to a bank's website seems to be more tight and not quite as flexible.

I remember there being a general guideline of something like being able to borrow 2.5x - 3x your joint salary but we're looking at nearer 4, which looking at some of the offers seems manageable for us in terms of repayments (around the 650-750p/m) but they may not be willing to lend us this much.

Just wondering if anyone has been in a similar situation recently, or knows how much realistically we could get with the following:

Joint salary = £33,300 (17500+15800)
Deposit = ~45k (will make sure we have 25%)
Hopefully looking at house worth ~175k (equivalent to a small 2 bed terrace)

Both 24 years old, been in work for about a year after leaving uni. Credit rating should be fairly standard, nothing special.

Thanks for any help
 
Where are you that £175k equates to a 2 bed terrace house? For that I'll be looking at a large 3-4 bed detached in a decent area :)

I'm looking at 5x my salary (£150k-175k). I will be disappointed if I can't get that. I'm off to see an advisor tomorrow so will be able to feed back my findings!
 
Gilly said:
Where are you that £175k equates to a 2 bed terrace house? For that I'll be looking at a large 3-4 bed detached in a decent area :)
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Man, I would be lucky to get a 2 bed terrace for that here :(

That is a mighty impressive deposit, saved all that?
 
Gilly said:
Where are you that £175k equates to a 2 bed terrace house? For that I'll be looking at a large 3-4 bed detached in a decent area :)
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Really?

For £175k I'd be more expectant of a 3 bed semi-detached, in an area that could go either way.

Wouldn't find much hope of a detached in a decent area with that money.
 
You would be lucky to get a 2 bed Flat round my way for £175K, I know as we sold our 2 bed flat for that end of last year to upgrade to a 3 bed house.
 
When we got our mortgage with the Brittania, the limiting factor was the deposit more than our salaries - we had to have a 25% deposit. Looks like you're good for that. I think they were prepared to go to 4x salary, but the deposit thing kicked in long before that point.
 
We borrowed 102,000 on a similar income (though this WAS a few years ago) and there were no problems whatsoever. I don't think you'll have many problems considering you have a nice hefty deposit.

The only advice I could give is REALLY make sure that this is somewhere you want to live. Investigate the HELL out of it.

We made the mistake of jumping in without checking every single aspect out. Now, after 4 years of constant harassment, vandalism and stress, we're jacking it in. Getting the place valued and, summer this year, selling it at a loss on the cash market to go rent somewhere decent. We just can't live this way anymore, and my (already fragile) mental and physical health just isn't worth worrying about the hit in the pocket.

We won't even be considering buying again until (and I know it sounds quite sickening and mercenary) either of us become benefactors of inheritance. We just won't be able to save enough for a deposit again any time soon. Hell, with all the money we've lost to this pit we find ourselves approaching our 30s and never had a single holiday outside of Europe, plans for children abandoned for now as we wouldn't even dream of trying to raise one around here and take the added stress.

Buying the wrong property can lead to an almost soul-destroying chain of events and consequences. Please make sure you know it's for you.
 
Pestilence said:
Really?

For £175k I'd be more expectant of a 3 bed semi-detached, in an area that could go either way.

Wouldn't find much hope of a detached in a decent area with that money.
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I'm looking in a large town in West Yorkshire, none of those nancy southern places and not in a city.
 
Gilly said:
Where are you that £175k equates to a 2 bed terrace house? For that I'll be looking at a large 3-4 bed detached in a decent area :)

I'm looking at 5x my salary (£150k-175k). I will be disappointed if I can't get that. I'm off to see an advisor tomorrow so will be able to feed back my findings!
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Assuming that's around Leeds?
You don't half get a lot for your money round there then, £175K would buy you a 1 bed flat at most round here :(

If you have 25% deposit you may get 5x salary, but even then I suspect you'd be pushing it.

EDIT: LOL, this is what £175K buys you here http://www.rightmove.co.uk/property-for-sale/property-27507631.html
It's really quite depressing!
 
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Indeed, i'd MAYBE expect a 3 bed detached in a rougher area for £175k. Good work on the savings, the wife an i had 2.5x mortgage.

And Gilly if you can get 5x good job, but i HIGHLY doubt it, and even if you do i'd advise against it - the rates are low - maybe for another 6 months or so MAX, at which point they'll go up. Whilst they aren't the significant contribution to the cost of a mortgage currently (the lenders fees contribute more than the base-rate) an increase of 0.5-1% WILL see a jump in real mortgage costs.
 
Make sure you work out what the repayments would be if/when interest rates start to rise again. A couple of percent can make a big difference. We found a mortgage advisor to be extremely useful in finding a good deal.
 
Morba said:
He said 'decent area' :p
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Exactly, so I reasonably assumed it wasn't down south ;)
Haircut said:
Assuming that's around Leeds?
You don't half get a lot for your money round there then, £175K would buy you a 1 bed flat at most round here :(

If you have 25% deposit you may get 5x salary, but even then I suspect you'd be pushing it.
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Deposit isn't really a problem, we'll be borrowing, but from our families without any rush to pay back immediately.

We're 10 miles outside Leeds, and with the amounts I stated I haven't taken our lass's salary into account.
 
I always say this, go and see and independant broker it should be free so even if you don't take their advice you should learn a lot about the market and what you could get. I was staggered when our broker told me the maximum amount we could secure on our salaries.

Don't forget to budget for a rate hike, interest rates are incredibly low at the minute and will rise at some point.
 
Blue160 said:
Make sure you work out what the repayments would be if/when interest rates start to rise again. A couple of percent can make a big difference. We found a mortgage advisor to be extremely useful in finding a good deal.
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Or go fixed... I went for 10 years at 5.49% on the basis that interest rates are being predicted to go well above that at some point soon.
 
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