Mortgage advice - first time buyer

[Delvis]

Make sure you check out the LISA, you've not got a great deal in the HTB ISA for the bonus to be worthwhile. If you're going to be saving for the next 12+ months, then you can get a 2k bonus from depositing 8k. Depending on how much you can both save each month, you can open one each and double the bonus - again assuming neither of you have owned a property before.



Yeah i don't want to put a downer on it , but first thing is being realistic about what's affordable to you both - have a read of some of the horror stories in this sub-forum, or even over on MSE where people find they have unaffordable mortgages.

If you're looking at 240k, then that's quite a bit of a deposit you'll both need to save.

Yeah, thank you for the insite

Indeed though, realistically speaking we probably can't afford that any time soon

regardless of how much they pay - more money is more money.

when i was saving for a deposit. i worked a second job where they pay ranged from minimum wage to £15 an hour depending on the role assigned. also shifts could be as little as 3 hours to as much as 12 hours.

with it being a second job it was all taxed with no deductions as my main job got all those. so sometimes you were walking away with peanuts.

your combined income is around the 45K mark i believe so that means you can get a mortgage for around 180K which means you need a deposit of around 80K if you are looking to buy a place worth 240K. because 20K of that deposit will be eaten up by solicitors fees, stamp duty, furniture, other costs, etc. remember you will have to fully furnish the place which means beds, dining tables, tv's, couches, coffee tables, washing machines, etc. all of this stuff costs money then add in stuff like cooking appliances, kettles, irons, carpets and anything which needs doing.

also how are you planning on splitting the bills with you earning more than double your partner? what happens if it doesn't work out? have you looked at how expensive council tax is on a £240K property?

the reality is you are going to be paying more to enjoy the same stuff so she is essentially getting a lot more for her money. this isn't an issue for high earners but at the lower end it can cause friction. especially since her wage is below minimum wage full time employment.

It was more to replace existing work with a permanent role that's more of a guaranteed income.

Bills are bills, if I earn more than i put more in, simply really. Welcome to marriage

As for furnishings we live in a flat essentially now, so I have our own furnishings, sofa, TV, bed, side table, wardrobe etc etc

 

[Psycho Sonny]

Yeah, thank you for the insite

Indeed though, realistically speaking we probably can't afford that any time soon



It was more to replace existing work with a permanent role that's more of a guaranteed income.

Bills are bills, if I earn more than i put more in, simply really. Welcome to marriage

As for furnishings we live in a flat essentially now, so I have our own furnishings, sofa, TV, bed, side table, wardrobe etc etc

still you would need a 70K deposit then to be on the safe side of things. also with your wife being self employed how does things like her pension and maternity leave work?

she won't be entitled to pretty much anything so she either needs to up her income considerably or get a job which provides benefits and security like the above. i take it she gets zero holiday pay too as well as any holidays then? so if you decide to go away for 2 weeks potentially that is 2 weeks lost earnings for her?

i wouldn't be taking any of her income into account tbh until she got a job and she could do her self employed stuff around that. lots of places offer part time shifts.

 

[Skillmister]

This is one of those rare occasions where Psycho Sonny is speaking sense.

What hours does your Mrs work? If she's bringing in less than a min wage income then surely there is scope for a second job unless her own business is basically paying slave labour?

Does 240k get you the house you need or the house you want? When I was with my ex she wanted a 180k+ house yet we'd have been perfectly comfortable space and location wise in the one I ended up buying myself (sub 110k). As a result I'll be able to overpay significantly. And because I bought something that needed work, it's probably worth approx £125k now so when I remortgage in October i'll be able to bring the LTV down again.

 

[Semple]

This is one of those rare occasions where Psycho Sonny is speaking sense.

What hours does your Mrs work? If she's bringing in less than a min wage income then surely there is scope for a second job unless her own business is basically paying slave labour?

Does 240k get you the house you need or the house you want? When I was with my ex she wanted a 180k+ house yet we'd have been perfectly comfortable space and location wise in the one I ended up buying myself (sub 110k). As a result I'll be able to overpay significantly. And because I bought something that needed work, it's probably worth approx £125k now so when I remortgage in October i'll be able to bring the LTV down again.

There's still a bit of waffle there

Based on the fact OP is renting, and doesn't have much of a deposit etc would be safe to assume he's a FTB, so therefore he's stamp duty exempt which will save a few k. Solicitor fees should only be around 1-1.5k and ~500 for HB report. Even if he has no stuff you'd just buy only what you need, even if it meant second hand from gumtree.

Halifax suggests he'd get a mortgage of upto 200k, so i'd put his deposit at 45/50k.

 

[Psycho Sonny]

There's still a bit of waffle there

Based on the fact OP is renting, and doesn't have much of a deposit etc would be safe to assume he's a FTB, so therefore he's stamp duty exempt which will save a few k. Solicitor fees should only be around 1-1.5k and ~500 for HB report. Even if he has no stuff you'd just buy only what you need, even if it meant second hand from gumtree.

Halifax suggests he'd get a mortgage of upto 200k, so i'd put his deposit at 45/50k.

no way he gets £200K especially with her being self employed. on his income alone you are talking £150K max. more realistically £120K. with hers lucky to get up to £180K max and realistically £150K.

ideally IMO as a first time buyer he should be looking to buy something around £170K max IMO with the sort of income he's stating. it puts him in a stronger more comfortable position in terms of overpayments, accounting for maternity leave/pay, etc. what if his partner becomes ill? if he's going to go for a £240K property he needs to then be spending £200 a month on various insurance policies (health and life, etc).

 

[Semple]

no way he gets £200K especially with her being self employed. on his income alone you are talking £150K max. more realistically £120K. with hers lucky to get up to £180K max and realistically £150K.

I don't control the calculators. OP said he's on 30k, and his wife is on about the tax threshold, which is what, 12k. Stick that into Halifax's mortgage calculator and it'll give you 199.5k. Which is perfectly within typical bounds 42*(4.5 - 5)=189-210k, infact (although irrelevant to the OP) there are some lenders that will go upto 6 times salary, although highest earner must be above 50k.

 

[Psycho Sonny]

I don't control the calculators. OP said he's on 30k, and his wife is on about the tax threshold, which is what, 12k. Stick that into Halifax's mortgage calculator and it'll give you 199.5k. Which is perfectly within typical bounds 42*(4.5 - 5)=189-210k, infact (although irrelevant to the OP) there are some lenders that will go upto 6 times salary, although highest earner must be above 50k.

those calculators are to suck people in. when they sit you down they will be more firmer. especially when they see she is self employed.

i reckon he could get £180K max. if interest rates go up after brexit like people are predicting he will be lucky to get £160K if he walks in after an interest rate hike or two.

 

[Syla5]

I don't control the calculators. OP said he's on 30k, and his wife is on about the tax threshold, which is what, 12k. Stick that into Halifax's mortgage calculator and it'll give you 199.5k. Which is perfectly within typical bounds 42*(4.5 - 5)=189-210k, infact (although irrelevant to the OP) there are some lenders that will go upto 6 times salary, although highest earner must be above 50k.

That does sound like it doesn't factor in any monthly outgoings though. Factor in standard house hold bills of at least £500 pm and you are going to see that drop.

 

[Syla5]

those calculators are to suck people in. when they sit you down they will be more firmer. especially when they see she is self employed.

i reckon he could get £180K max. if interest rates go up after brexit like I AM predicting he will be lucky to get £160K if he walks in after an interest rate hike or two.

Fixed that for you.

 

[Psycho Sonny]

Fixed that for you.

i said the opposite they should stay steady or in fact go down. they said they need to go up so in the event of a no deal they can then after a while they can decrease them to boost things. whereas if they are already low they can't make them any lower. so expect hikes before a drop.

i was of the opinion most can't afford them to go up by much and if they did there would be a lot of social unrest and the poorest would protest then riot.

 

[Delvis]

still you would need a 70K deposit then to be on the safe side of things. also with your wife being self employed how does things like her pension and maternity leave work?

she won't be entitled to pretty much anything so she either needs to up her income considerably or get a job which provides benefits and security like the above. i take it she gets zero holiday pay too as well as any holidays then? so if you decide to go away for 2 weeks potentially that is 2 weeks lost earnings for her?

i wouldn't be taking any of her income into account tbh until she got a job and she could do her self employed stuff around that. lots of places offer part time shifts.

Correct.

Self employed, so anytime not working is no income because all the work is based on visits to clients.

This is one of those rare occasions where Psycho Sonny is speaking sense.

What hours does your Mrs work? If she's bringing in less than a min wage income then surely there is scope for a second job unless her own business is basically paying slave labour?

Does 240k get you the house you need or the house you want? When I was with my ex she wanted a 180k+ house yet we'd have been perfectly comfortable space and location wise in the one I ended up buying myself (sub 110k). As a result I'll be able to overpay significantly. And because I bought something that needed work, it's probably worth approx £125k now so when I remortgage in October i'll be able to bring the LTV down again.

240k is just a house that popped up down here, 2 bed.

Can I ask roughly what your wage was and what deposit you had?

There's still a bit of waffle there

Based on the fact OP is renting, and doesn't have much of a deposit etc would be safe to assume he's a FTB, so therefore he's stamp duty exempt which will save a few k. Solicitor fees should only be around 1-1.5k and ~500 for HB report. Even if he has no stuff you'd just buy only what you need, even if it meant second hand from gumtree.

Halifax suggests he'd get a mortgage of upto 200k, so i'd put his deposit at 45/50k.

Yes we'd be first time buyers.

Rent isn't a lot atm but I've been unable to save much untill now, really I should have changed jobs two years, live and learn.

no way he gets £200K especially with her being self employed. on his income alone you are talking £150K max. more realistically £120K. with hers lucky to get up to £180K max and realistically £150K.

ideally IMO as a first time buyer he should be looking to buy something around £170K max IMO with the sort of income he's stating. it puts him in a stronger more comfortable position in terms of overpayments, accounting for maternity leave/pay, etc. what if his partner becomes ill? if he's going to go for a £240K property he needs to then be spending £200 a month on various insurance policies (health and life, etc).

Going by what everyone is saying we'll defodefini need to lower what we can get, as I'm not going to be saving 50k any time soon....so we'll probably end up renting annoyingly, which is money down the drain

I don't control the calculators. OP said he's on 30k, and his wife is on about the tax threshold, which is what, 12k. Stick that into Halifax's mortgage calculator and it'll give you 199.5k. Which is perfectly within typical bounds 42*(4.5 - 5)=189-210k, infact (although irrelevant to the OP) there are some lenders that will go upto 6 times salary, although highest earner must be above 50k.

Not for me then

those calculators are to suck people in. when they sit you down they will be more firmer. especially when they see she is self employed.

i reckon he could get £180K max. if interest rates go up after brexit like people are predicting he will be lucky to get £160K if he walks in after an interest rate hike or two.

Yep, Brexit is going to do something no doubt, can't wait :/

That does sound like it doesn't factor in any monthly outgoings though. Factor in standard house hold bills of at least £500 pm and you are going to see that drop.

Yarp

 

[Buffman]

Correct.

Self employed, so anytime not working is no income because all the work is based on visits to clients.

240k is just a house that popped up down here, 2 bed.

240k you're going to want a minimum 10% deposit (24k). As an example my house was circa 250k, 10% and we were then earning circa 60k (roughly half and half ). Admittedly it needed a lot of work (&money) and as a result, is now worth a lot more (hopefully!).

You can also get the help to buy schemes with 5% deposit, but you will get a worse rate, and need to work out how to pay off the government owned percentage after 5 years.

Does your wife stay at home/look after kids? Otherwise I'd agree with other responses in that it would help you accumulate some more cash if she had another job.

Tbh I'd always look to max out mortgage as I have low outgoings elsewhere, next place I'll probably be doing the same

 

[Semple]

That does sound like it doesn't factor in any monthly outgoings though. Factor in standard house hold bills of at least £500 pm and you are going to see that drop.

Fwiw household bills aren't factored in as a monthly commitment (as silly as that may sound). The monthly commitments are for things like credit / 3 year PCPs / Student loans.

 

[Delvis]

240k you're going to want a minimum 10% deposit (24k). As an example my house was circa 250k, 10% and we were then earning circa 60k (roughly half and half ). Admittedly it needed a lot of work (&money) and as a result, is now worth a lot more (hopefully!).

You can also get the help to buy schemes with 5% deposit, but you will get a worse rate, and need to work out how to pay off the government owned percentage after 5 years.

Does your wife stay at home/look after kids? Otherwise I'd agree with other responses in that it would help you accumulate some more cash if she had another job.

Tbh I'd always look to max out mortgage as I have low outgoings elsewhere, next place I'll probably be doing the same

Yeah we have a help to buy ISA, but you don't have to take their money but looking at prices we'll be in that bracket anyway.

No we don't have kids. She's been looking for alternative work, she's a vet physio and one day is dedicated to that, the other work is dog walking and all of a sudden some clients have dropped out (because they're working from home for instance)...So she's looking for work between Tuesday-Friday now, as the vet physio work is what she wants to be doing full time just it's taking a while for vets to take them on board.

 

[Delvis]

Fwiw household bills aren't factored in as a monthly commitment (as silly as that may sound). The monthly commitments are for things like credit / 3 year PCPs / Student loans.

Me personally I just have a small amount in a credit card, another I use every day then clear at the end of the month, then a direct debit for a sofa.

Then obviously some other direct debits.

 

[Skillmister]

Yeah we have a help to buy ISA, but you don't have to take their money but looking at prices we'll be in that bracket anyway.
.

Throughout this thread whenever someone mentions help to buy you say you already have a help to buy isa.. They are two totally different things.

Help to buy is the government assisted equity loan scheme where you buy a new build house putting up 5% deposit (plus fees), the government contributes 20% as a 5 year interest free loan and you get a mortgage for the other 75%.

Personally I don't agree with it in most situations as it gets people into more expensive houses they wouldn't otherwise be able to afford on the assumption that within the next 5 years their circumstances will change enough that they can repay the equity loan (either through savings, increased salaries leading to ability to borrow more or increased property prices) when in reality if circumstances don't change enough in 5 years time they will be left paying another £x amount in interest on top of their normal mortgage.

For some people it does seem beneficial because at least it can get them on the ladder and start paying towards equity rather than rent. It's just the majority I've dealt with have ended up going from looking at 150-180k houses to buying a 250k new build because their deposit goes further.

 

[Skillmister]

@Delvis I can't be bothered editing your multi quote above on my phone but I borrowed 91k on a 19.5k salary with a 16.5k deposit (so I was just under 85% LTV which brought the rate and thus payments down). Payments are 335/m.

92.5k was the max I could borrow on that salary.


Having a second income makes a huge difference... If I'd had a partner on 12k we'd have been able to borrow 150k!

 

[Syla5]

Fwiw household bills aren't factored in as a monthly commitment (as silly as that may sound). The monthly commitments are for things like credit / 3 year PCPs / Student loans.

Yes they are, everything is factored in to affordability testing for all mortgage applications. It is heavily regulated and has been since the last big financial crisis.

 

[Semple]

Yes they are, everything is factored in to affordability testing for all mortgage applications. It is heavily regulated and has been since the last big financial crisis.

Wasn't when i applied for mine last year. All they were interested in was my student loan, and anything i had on credit (excluding phone contracts).

 

[Skillmister]

Yes they are, everything is factored in to affordability testing for all mortgage applications. It is heavily regulated and has been since the last big financial crisis.

The Halifax mortgage calculator doesn't mention household bills in their monthly commitments section. If it was that important you'd think it would? Don't recall my mortgage advisor asking about bills either.