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How do mortgages work for 2nd time buyers

(9 Posts)
Twinkletron Thu 09-Jan-14 11:01:54

I'll try my best to keep this brief smile

We bought our 2 bed house 5 years ago (£174,000)
Has recently been valued at (£180,000)

We still owe £150,000 on the mortgage and our 5 year plan is to pay off another £30k so in 5 years will have capital of £60k

We got our first mortgage based on our joint full time salary but I have since gone part time after having my son.

My DH income is £38k and mine is now £15k

What sort of figure are we looking at being able to borrow.

(I don't need it to be exact as its a 5 year plan, I just don't want to get my heart set on a type of house for the next 5 years to only find out we can get anywhere near it)
TIA

CogitoErgoSometimes Thu 09-Jan-14 12:03:23

It'll come down to affordability (disposable income after other commitments), credit rating, the value of the property you want to buy and the lender's own criteria. It's probably worth talking to an independent mortgage advisor.

Twinkletron Thu 09-Jan-14 12:47:43

We've found an area and type of house that we would love to move to. They are about £240k and just wanted a very rough guess as to whether this is achievable or totally out of reach.

Artandco Thu 09-Jan-14 12:52:19

I would say x3 annual joint salary as standard. So 38 + 15, £53k. £159000 roughly. Plus the £60k deposit. Leaves you a max of £220k

aliciagardner Thu 09-Jan-14 12:54:15

Have a look here l&C

Twinkletron Thu 09-Jan-14 12:54:22

Bum.... I need to do a bit more saving then! I wonder how much I'll get if I send my DH out onto the street! Lol wink

Twinkletron Thu 09-Jan-14 13:00:53

Thanks alicia... Just used that using our predicted pay in 5 years and according to that we would be able to borrow up to £245k. With our savings and Capitol we only need about £180k so seems to be fully achievable yay!! I'll get back onto pin interest and start dreaming!

CogitoErgoSometimes Thu 09-Jan-14 13:01:27

If you're saying you're looking to borrow £180k (75% LTV) over 25 years (guessing) it's probably going to cost you between £800 and £900/month at current rates. If you stack up all your existing commitments, increasing them slightly because it's a bigger house and factoring in a few percent for savings and another few percent for 'the unexpected', would you be able to afford that kind of outgoing each month?

Twinkletron Thu 09-Jan-14 14:21:16

We are currently overpaying our mortgage by £800 so hopefully shouldn't be too much of a problem. DH has also been paying into a works saving scheme so we 'll start getting them in a few years (aprox £5k per year) which will be for household repairs etc

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