Buying a £150-200k House

[typer0612]

Hello,

I see a lot of useful posts, but i am in a bit of a muddle with myself.

Currently i am renting, downsized already in the rent from £1300 PCM to £850 PCM.

The thing is, i've had enough of renting and want to actually buy somewhere which will result in less outgoings. Win-win all around. I don't have the earning power of a company director but earn a modest amount and have youth on my side... ONLY 23.

The figures don't make sense to me currently and i don't think it is possible...

£20k deposit
£130-150,000 mortage

I earn approximately £30,000 per year, Is it actually possible for me to go and get a flat for that amount and pay less than £800 a month? If not possible why?

The answer i've come up with is i don't earn enough. Am i right? This is a real world problem with young people who cannot simply get the monies for the deposit.

(I want it solely in my name also ideally however i am slightly open to suggestions if other people were on it - increasing the chances of approval)

Edited by typer0612 on Tuesday 8th October 13:37

[Tino]

£150000 is 5x your earnings.
To get the best deals, you would probably be maxed out at 4x depending on any other loans or debs, credit history.
You are young, so can extend the mortgage over a very long period, say 35 years.
As an example, I borrowed 123000 at 2.79% over 30 years and pay just over £500. Obviously rates will increase with time, and there is a likelyhood that with your loan to value, you may find it difficult to get the same sort of rate, but even on a higher rate, over a longer period you should be looking at under £600
Another thing that you need to realise is that property prices may increase over say the next 10 years, which will have an effect on rent payments. Your mortgage payments will remain obvisously similiar to today. And hopefully if your income increases, you could overpay to settle the mortgage earlier(I settled the £80k mortgage on my flat within 10 years)
Don't forget about other costs though, you will need to insure the property, maintenance, ground rents, etc etc

[kiethton]

I'm in exactly the same position even down to the age and salary, but with a far smaller deposit.

I'm in SE London which makes it especially tough, considering a dilapidated 1 bed flat (£150k!!!!) to do up over time but can't seem to go over 4x gearing, can't add my dad as a guarantor and keep a 95% mortgage either

I'm really just holding out on a new job which will hopefully come through and add 50% to my salary before bonus to get the borrowing ration but then have to be there for 6 months before applying, gets me a larger deposit yes, but shame that house prices are rising ever higher!

[Sarnie]

typer0612 said:

Hello,

I see a lot of useful posts, but i am in a bit of a muddle with myself.

Currently i am renting, downsized already in the rent from £1300 PCM to £850 PCM.

The thing is, i've had enough of renting and want to actually buy somewhere which will result in less outgoings. Win-win all around. I don't have the earning power of a company director but earn a modest amount and have youth on my side... ONLY 23.

The figures don't make sense to me currently and i don't think it is possible...

£20k deposit
£130-150,000 mortage

I earn approximately £30,000 per year, Is it actually possible for me to go and get a flat for that amount and pay less than £800 a month? If not possible why?

The answer i've come up with is i don't earn enough. Am i right? This is a real world problem with young people who cannot simply get the monies for the deposit.

(I want it solely in my name also ideally however i am slightly open to suggestions if other people were on it - increasing the chances of approval)

Edited by typer0612 on Tuesday 8th October 13:37

This is roughly what you'd be looking at if looking to get the lowest payment;

£170k Property
£150k mortgage
4.19% Two Year fixed rate
40 year term
Repayment mortgage
£644 per month

Or if you wanted a 35 year term;

3.99% Two Year Fixed rate
£663 per month

Edited by Sarnie on Tuesday 12th November 09:33

[Frio3535]

My partner had around £30k deposit earning ~38k and she could consider houses for ~£180k. My brother recently had a mortgage appointment with Halifax and his was 4x salary @ £24k.

I would consider both past and present rent values high for someone with your immediate plans.

Have you considered all possibilities? Shared ownership (Similar to Thames Valley housing)? Buying in a cheaper area? If you're set on a straight up house purchase I think you're stuck for the time being unless you're able to get 5x salary.

[typer0612]

Frio3535 said:

My partner had around £30k deposit earning ~38k and she could consider houses for ~£180k. My brother recently had a mortgage appointment with Halifax and his was 4x salary @ £24k.

I would consider both past and present rent values high for someone with your immediate plans.

Have you considered all possibilities? Shared ownership (Similar to Thames Valley housing)? Buying in a cheaper area? If you're set on a straight up house purchase I think you're stuck for the time being unless you're able to get 5x salary.

I've considered all options, current rent is as low as i could get realistically considering my circumstances, have a gf and a baby also.

Past rent was in a nice area of North London when i earned slightly more and had a motorbike and nice car but all that was gone when my son arrived hence now i am thinking buying rather than renting will be more sensible and the sooner i do it the better considering how much i have 'lost' on rent already.

I'm beginning to look at one bedroom flats now but really am not keen on that as i need my own space!

EDIT - I don't owe anything, everything is paid for. The outgoings i have are rent/food/bills that's it. The likehood of me getting a 35 year mortage is quite high i presume? I could also sell my BMW which is currently worth around £7k and sit tight a little to get another £3k making the deposit £30k but not overly keen on that solution as i use it regularly for my son.

The only choice i'd make is a straight up purchase because i need stability in terms of nursery + commuting to work... Will explore the options over the next few weeks and post back on here.

Edited by typer0612 on Tuesday 8th October 16:09

Edited by typer0612 on Tuesday 8th October 16:32

[typer0612]

UPDATE:

I have been to see the mortage advisor, he advised (Barclays) of their policy of only offering mortgages after 6 months of employment.

This is not good as my rental agreement expires January, i don't want to be binded into another six months when i could be saving in that period and living in my dads whilst the mortgage goes through (Approx 3 months of rent potentially wasted).

Is it not possible to work around this by going through a broker as i have a permanent contract of employment anyway...

I've worked out everything in terms of cost per month and amount of deposit. If it is actually possible i will put my BMW for sale to pay for stamp duty along with other bits and bobs.

[Sarnie]

typer0612 said:

UPDATE:

I have been to see the mortage advisor, he advised (Barclays) of their policy of only offering mortgages after 6 months of employment.

This is not good as my rental agreement expires January, i don't want to be binded into another six months when i could be saving in that period and living in my dads whilst the mortgage goes through (Approx 3 months of rent potentially wasted).

Is it not possible to work around this by going through a broker as i have a permanent contract of employment anyway...

I've worked out everything in terms of cost per month and amount of deposit. If it is actually possible i will put my BMW for sale to pay for stamp duty along with other bits and bobs.

This is entirely possible!

I'm a broker, drop me a mail

[typer0612]

Sarnie said:

This is entirely possible!

I'm a broker, drop me a mail

Brilliant.

Will email you in a bit, i'm at work currently.

[Berz]

typer0612 said:

This is not good as my rental agreement expires January, i don't want to be binded into another six months when i could be saving in that period and living in my dads whilst the mortgage goes through (Approx 3 months of rent potentially wasted).

It might be worthwhile checking your tenancy agreement to see what happens at the end of your current 6 months. In the absence of notice from me or the landlord, my last assured shorthold tenancy automatically turned into a periodic tenancy which let me stay there on rolling 1 month mini tenancy agreements which was very handy indeed for me at the time.

[98elise]

Berz said:

typer0612 said:

This is not good as my rental agreement expires January, i don't want to be binded into another six months when i could be saving in that period and living in my dads whilst the mortgage goes through (Approx 3 months of rent potentially wasted).

It might be worthwhile checking your tenancy agreement to see what happens at the end of your current 6 months. In the absence of notice from me or the landlord, my last assured shorthold tenancy automatically turned into a periodic tenancy which let me stay there on rolling 1 month mini tenancy agreements which was very handy indeed for me at the time.

That is quite normal. If a new AST isn't signed, then you go onto a periodic tenancy. Effectively every rent payment starts a new 1 month tenancy.

[typer0612]

typer0612 said:

Brilliant.

Will email you in a bit, i'm at work currently.

Hi Sarnie,

Could you drop me your email address via PM and I will reply!

Tried PMing you and going on your we blink but doesn't seem to work!

[Sarnie]

typer0612 said:

Hi Sarnie,

Could you drop me your email address via PM and I will reply!

Tried PMing you and going on your we blink but doesn't seem to work!

Hi,

My email address is in my profile details, just click on my username. I'll still drop you a PM though.

I did actually email you yesterday also.

[typer0612]

Sarnie said:

Hi,

My email address is in my profile details, just click on my username. I'll still drop you a PM though.

I did actually email you yesterday also.

Emailed