Went to look at some new builds nearby and to my surprise I've fallen in love with one! Never usually keen on new builds but this just has the right space and layout for our family and it's in a nice area. The problem is it costs Â£330k and my salary is only Â£36k! We have a Â£50k deposit and dh works but his salary won't count because he gets work via different agencies so no permanent contract. The salespeople suggested we look at the Help to Buy Scheme.
Am i being ridiculous to even consider taking on such a big debt?
I'm not sure how Help to Buy will assist you - it really only helps people with small deposits and that isn't your problem.
You are going to struggle to get any mortgage of that size unless you're taking account of your partner's income, which will have to be fairly significant to support a mortgage of that size and you will need to find a mortgage provider that will consider people without a regular salaried income, which is difficult since the crash and the death of self-cert mortgages.
I don't think you understand how this mortgage scheme works. Even on the right to buy scheme you have to be able to pay 75% of the mortgage. The bank will not allow you to borrow that amount even with a 50K deposit on a salary of 36k.
I'm sort of glad that's the case really! No, I don't understand the mortgage scheme. I thought it was only for first time buyers! When I said the house was out of my price range, the salespeople said that I should speak to someone about using help to buy.
I wish I'd never looked at the house, it was lovely and I'll never have enough money to buy anything with that much space!
Govt puts in 20%. You put in 10-15, I believe some have been accepted at 20%. Mortgage for the rest. Help to buy is brilliant and got me a gorgeous house and on the property ladder. Mortgage is 2/3 of my previous rent payment.
Get independent financial advice so you can work within a budget instead of the other way round.
I looked at help to buy recently and it seems to me that it almost encourages people to buy for more than they can afford. The government's contribution isn't repayable for five years (unless you sell). Why not? Why let people have what effectively amounts to a 20% loan with no immediate need to repay it? It's just storing up trouble for five years' time. It was supposed to be a scheme that helps people buy early rather than waiting while they save up a deposit, not for people who wanted a bigger house than they could afford.
From what I've read I'd have to agree Cake. I'm not sure why it is preferable to offer a loan so that people can borrow more than the bank would be happy to lend instead of just forcing developers to sell at a lower price?
Thanks Tobysmum77. He's not s/e though, he is employed on short term contracts via different agencies which enables him to take more time off over the course of the year than me for childcare purposes. So he might work for 3 months then take 2 months off, then get another 3 month contract with another agency. From advice I've had, this doesn't count as continuous employment so the money he earns doesn't count for mortgage purposes.