Mortgage advice.......?

Question

If I wanted a mortgage for approx 100,000 how much would my BF and I need to be earning together?

This will be our first time buy so any advice would be great!!

Thanks for answering!

Answer 1

Assuming that the Lender offers income multiples of four times joint income, you have £5,000 as a deposit and no other credit, then the answer is £25,000 between the two of you. As it is unlikely that you both earn exactly the same amount, you should also be aware that there is another way of calculating the maximum borrowing, which is the sum of four times the higher income and once of the lower. The higher of the two methods is then used.

Four times joint income is quite generous, but there are plenty of Lenders offering three and a half times, which gives required earnings between the two of you of £28,600. On credit cards, they would assume that you repay 5% of the balance each month and then deduct that annualised repayment from your salaries to arrive at the disposable income, which is then multiplied.

Generally, "useable" income would be all of your salary and half of regular payments, like bonuses.

Disclaimer:
The answers above are for guidance only and should not be acted upon without you receiving independent financial advice relevant to your circumstances. To find and IFA please call 0800 085 3250 or go to http://www.unbiased.co.uk.

Answer 2

As you are a first time buyer i thought that I would offer a Little advice. At the moment a mortgage of £100000 would cost you about £600 per month based on 5% interest. However historicaly interst rates have been much higher. In the late 80's they were nearly 20% which means your mortgage payment would be nearly 4 times this amount. It is not likely that with the economy as it stands that interest rates would get this high but it is not impossable. I tell you this because their are mortgage broker out there who would reccommend 5 times salery to get a mortgage. If your joint income is not £30,000 a year be careful

Hope this helps.

Answer 3

It's very interesting to see what the differences are between mortgage payments in the UK and the USA. Here the rule of thumb for mortgage payments for every $100,000.00 is $100.00 a month. Our market has collapsed at present because of inflated property values. Things have gotten out of hand and most very modest properties are going for $600,000.00 to $900,000.00 on a 30 to 40 year mortgage with a great big balloon payment due at the end. The banks are practically guaranteed to get the property back and the people losing their homes still have to pay the mortgage off after they have lost everything.
Even Landlords are demanding huge monthly rental prices for sub-standard rental units and we have a rapidly growing population of homeless people sleeping in the streets again. It's almost impossible to find a one bedroom apartment for less than $1,500.00 a month and restrictions against pets are the "norm." The average Nurse or Auto Mechanic can't afford an average apartment on their own. We have to "double up" with someone else or forget it! It hasn't been this bad since Ronald Regan was President.
As a result people are defaulting at a tremendous rate, and the banks are gluted with seized properties they can't move. GREED has taken over and turned good honest people into MONSTERS!
Do you still wish you were living in California, USA?

Answer 4

Mortgage payment for 100.000. @ 7% , 30 yr fixed is roughly
$650. principle & interest. I think it's a good idea to have your taxes and insurance combined with your payment. Depending on the amount of those, you may be looking
at a payment between $800.-$1000. A lot will depend upon your downpayment. Is this more than your current rent? If
so could you cut some "perks" to make it easier? Good luck.

Answer 5

There are some sharks out there who would loan you that amount regardless, but if you don't want to get into trouble you want to be thinking between 3 and 3.5 times your combined salaries.

The easist way to work it out, is to find out how much spare cash you have each month, and use this in one of the many 'Mortgage Calculators' you find on the banks site.

Answer 6

i'm not sure but your best speaking to independent financial adviser as they have to be do whats best for you and not the bank or building society. i don't usually recommend companies but epicfinancialservices.co.uk dealt with my mortgage and did a great job

Answer 7

Around £30,000 per year between you.