Mortgage / buying house help please

[ishopthereforeiam]

Hi all,

Generally speaking, If you have ten percent deposit can you only borrow 500k, whereas if you have twenty percent you could borrow up to £1m? I know it varies from mortgage provider but just after a general indication as to how much we need etc

Also, if you want to put an offer in on a house, can you only do that once you've arranged the mortgage?

Tia!

I have no idea about the 1/2 million / million thing - way out of my league .

You can put an offer in on a house whenever you want. However they will be unlikely to take it off the market unless you have the finance in place.

The larger the deposit the better the interest rate you will have on a mortgage. Generally speaking the value of the house you can buy is your deposit + 3.5 x your income (or 2.5x of a joint income). The income multiples vary depending on the mortgage provider. Plus some providers will make you pass affordability tests based on your monthly salary and regular outgoings to ensure you can keep up the mortgage payments. Again this varies.

Thanks both, really bad timing as just resigned so should've sorted the mortgage stuff out whilst I was employed still.

I guess the point back makes also means you could get gazumped.

If you speak to the mortgage provider you want to go with, they will arrange you an Agreement in Principle which basically says they are happy to lend you the money once you buy a house. This will be credit scored and income assessed, you shouldn't be charged anything for this, and will be valid for a certain amount of time (usually 3-6 months). If you have this in place an offer made on a property will be taken much more seriously.

Don't apply for a mortgage before having an offer accepted as you will be committed to paying the fees if you don't end up taking the mortgage / not taking it up in time!

The size of deposit determines the interest rate on the amount you borrow. The total amount you can borrow is determined by your income, credit rating and the policy of your lender.

Thanks rockchick - I think we will also look into bridge loans as an option.

Do you mean you only currently have 10% deposit while waiting to sell your current property? A bridging loan is also still based on income/expenditure and credit score, and can generally only be used to buy a property while waiting for your current property to sell, they are also an expensive way to lend money.

Thanks - yes, just while we wait for ours to sell we could have a short term loan and then once our home sells we can repay it.

It's all my own fault as I started browsing properties for sale without really thinking of a budget (!) and obviously got drawn to things a bit out of our price range!