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Original poster

How much will I need to earn to get a mortgage alone?

80 replies

MushroomTree · 17/11/2019 13:26

I'm a single parent to one DC and would like to get on the property ladder in the next 2-5 years.

I'll be buying alone in Hampshire/Dorset. I imagine budget will be 200k max.

I'm lucky enough that when the time comes I have money from a family member for one of the "lend a hand" mortgages.

But how much am I going to need to earn per annum to get a mortgage in the first place?

I'm in the middle of retraining and will be changing jobs once this is done so my financial situation will be different when I purchase a property.

OP posts:
granadagirl · 17/11/2019 13:38

Well if houses are about 200k then deposit is
So either you need mortgage for
95% 195k
90% 190k
So you’d be looking at mortgages depending on deposit 5k or 10k

It depends some will lend 3 times salary other upto 5, maybe mortgage broker will be better as they gave more providers
I’d probably say anything between
40-50k

Redtartanshoes · 17/11/2019 13:41

Some mortgage providers will take into consideration child maintenance if applicable also

Original poster
MushroomTree · 17/11/2019 13:43

Thank you @granadagirl. The deposit isn't so much an issue. It's being able to earn enough to be given a mortgage.

@Redtartanshoes the £22 a month I get in child maintenance unfortunately isn't going to help me in this situation.

OP posts:

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Redtartanshoes · 17/11/2019 13:46

Oh that’s shit ☹️

I’d agree £40-50k would be around right but unfortunately the ever increasing shit state of the country will mean things maybe very different in 2-5 years time

Passthecherrycoke · 17/11/2019 13:49

Average about 4* your salary. So for a £200k house, 15% deposit the mortgage is £170k. So in the early £40ks

BendingSpoons · 17/11/2019 13:49

Lots of the main banks/building societies have online calculators that work out how much they would lend you. If you put in your potential salary and deposit you will get a figure. They are likely to do a better multiple on your salary if you have a bigger deposit, as you are 'safer', but they do tend to be reasonably cautious now.

Original poster
MushroomTree · 17/11/2019 13:50

Thanks everyone. I'd better finish training and start moving up the ranks quickly then. 5-10 years is probably more likely than 2-5.

OP posts:
chocolatespiders · 17/11/2019 13:51

I often wonder this.. I have rented for 17 years and would love to buy as I hate sleeping in the lounge as I dont have a bedroom and as I get older this is having more of an affect on me. I earn 24k as single parent so after seeing the figures here now realise it's not going to happen.
Hope you are able to buy.

Passthecherrycoke · 17/11/2019 13:52

The problem is in 10 years the £200k property might be £300k so you’ll need to earn more again. Have you looked at shared ownership?

Original poster
MushroomTree · 17/11/2019 13:53

@Redtartanshoes it is shit. But unlikely to ever increase by more than a few pounds. It's more likely to stop completely. In any case, I wouldn't want to base my ability to afford my home on that money.

OP posts:
Original poster
MushroomTree · 17/11/2019 13:55

@Passthecherrycoke everyone I've spoken to has advised me to steer well clear of shared ownership.

Plus the "lend a hand" mortgages can't be used on shared ownership so I wouldn't be able to buy one anyway. I'll never raise enough for a deposit on my own. I'm extremely lucky that there is money available to me for that kind of mortgage if I can get one but it isn't money that can just be given to me to buy any property.

OP posts:
Passthecherrycoke · 17/11/2019 13:57

You don’t need a full deposit for shared ownership, it will costs you a couple of grand to buy though.

Most people don’t understand shared ownership so it’s worth researching for yourself. Better than not owning

weehoo · 17/11/2019 14:01

Affordability gets factored in too - DP and I earn a relatively decent amount between us and had a big deposit (from sale of my house). But because of credit card debts and childcare outgoings, we were limited to borrowing around 2.5 times our income.

We will need to borrow more for renovation, but childcare costs are decreasing as DD2 will be out of nursery soon and I'm rapidly paying off the credit card!

Skinnychip · 17/11/2019 14:03

I don't know much about them except they are changing on 30th November but it might be worth looking at help to buy isas. You have to be a first time buyer to get one though. I heard money saving expert Martin Lewis talking about them last week but was only half listening

Original poster
MushroomTree · 17/11/2019 14:05

@Passthecherrycoke I'm going to do more research on it. Everyone has advised me it's a false economy though.

And I've heard horror stories of not being able to sell them on if you need to and being liable for 100% of costs even though you're renting a larger % than you own.

Obviously 100% of any maintenance is yours if you buy a house normally but it seems a cheek to have you rent most of it but still make you pay for it as though you own it all.

@weehoo DD is nearly 3 so I'm hoping by the time I buy the childcare costs will have reduced and my salary will have increased by a fair amount.

OP posts:
Original poster
MushroomTree · 17/11/2019 14:06

Thanks @Skinnychip. I'll get on the Martin Lewis website and check it out.

OP posts:
Passthecherrycoke · 17/11/2019 14:07

But presumably otherwise you’re going to just be paying rent anyway? No offence but you seem really quite far away from being able to buy so it could be a great option

Original poster
MushroomTree · 17/11/2019 14:14

@Passthecherrycoke believe me I agree with you but so many people have told me not to touch shared ownership I've been doubting if it's a good idea.

If it's a choice between that or renting for the rest of my life I'll choose shared ownership.

OP posts:
Passthecherrycoke · 17/11/2019 14:19

I think a lot of people mistake shared ownership for something else (what, I don’t know, it sounds like they think it’s some dodgy timeshare scheme or something Grin)

Original poster
MushroomTree · 17/11/2019 14:24

@Passthecherrycoke I think you're right. I've definitely heard that opinion.

The more sensible advice is that you end up paying significantly more than you would with a traditional mortgage.

And that they can be difficult to sell people no one else wants to only buy 25% or whatever of a house.

I'm also a bit sceptical about buying a new build as they seem to be notoriously badly built and have no end of issues quite early on.

But if it is that or renting forever then I'll have to take my chances.

OP posts:
Passthecherrycoke · 17/11/2019 14:28

You can keep buying more of most shared ownerships, in stages until you own 100%. Then there is no problem selling on

If you own less than 100% when you want to sell you have to sell to another person who qualifies for the shared owner scheme- obviously you can’t just sell to anyone.

I don’t think you’ll end up paying more than a traditional mortgage. Interest rates can be higher, (but they’re very low anyway) but on a smaller mortgage so swings and roundabouts. Have a look into it

Original poster
MushroomTree · 17/11/2019 14:34

@Passthecherrycoke that was my understanding.

Plus I intend to buy somewhere I want to stay longterm. The area I'm looking at moving to is close to family, good schools and better employment opportunities so I don't plan on moving every few years.

I was all for it but everyone I've mentioned it to has looked at me like I've suggested selling my soul to the devil in exchange for a house little better than a cardboard box Grin

OP posts:
misspiggy19 · 17/11/2019 14:36

I wouldn’t touch shared ownership. I know 2 people trapped in theirs.

Passthecherrycoke · 17/11/2019 14:38

Why are they trapped?

PinkSpring · 17/11/2019 14:45

I would recommend Shared Ownership.

We purchased ours about five/six years ago, we purchased 55% and had a 5% deposit. We have just staircased to 100% so we now own the freehold and the house "normally".

With the cost of housing around here increasing, we now have just over £40k of equity in the house which we will then use towards a deposit for our next house or towards an extension.

Yes, you are responsible for all the repairs, but generally shared ownership properties are brand new and have few issues.

As for selling them on, there are no problems here - in fact they sell within days. When we purchased ours, we had to go on a waitlist