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Original poster

How much could we borrow? I am clueless re mortgages.

20 replies

Lotsofsausage · 03/03/2018 22:35

My partner and I rent and have never managed to save any significant amount for a deposit, especially living in one of the most expensive counties of the UK. I never have any more than 7k saved which I have to dip into every now and then. Partner has no savings as is paying off old credit cards. most of my friends are home owners now but although I'm pretty careful with money I'm just not there yet.
We both work FT and we earn over 60k combined and pay 1k rent pcm with no problems. Could possibly borrow small amount from parents for deposit (not the 30k that would be needed in my area) so am considering relocating elsewhere for cheaper options. Does anyone know what kind of figure we could borrow on a combined 60k salary provided we pass credit checks and we would have guarantors?

OP posts:
JoJoSM2 · 03/03/2018 23:11

I don't think you'd need guarantors. Just very good credit rating.

With this level of salary, it shouldn't be a problem to borrow up to 200k but you'd need to speak to a mortgage broker + your monthly repayments would probably be less than current rent. Affordability will be lower if there's any debt outstanding or commitments such as child maintenance etc.

Obviously, your ability to buy anywhere will be limited by the amount of deposit and you need to factor in things such as buying costs (stamp duty and legal fees).

NeverTwerkNaked · 03/03/2018 23:21

On that salary y

Magmatic80 · 04/03/2018 06:56

Go on money saving expert, he has loads of calculators that will help you, and a first time buyer advice guide which I found invaluable. Even just go on your own bank’s website and on the mortgages pages you’ll find simple ‘how much can I borrow’ calculators. Good luck!

Pinkroseuk · 04/03/2018 07:19

We have a combined income of just under £60k and have a small 5% deposit and had no problems buying for £260k house- the repayments are similar to your rent now but we had quite a high interest rate due to only small deposit :)

MaverickSnoopy · 04/03/2018 07:21

We bought 2 years ago when our combined income was £53k and our broker said we would get a mortgage of up to £240k. In the end we borrowed £225k as the house we found was a little less and we didn't want to really borrow £240k as we personally felt that it would have stretched us. It would have. Our mortgage repayments are £950/month and we had a 10% deposit (so house was £250k).

The money saving experts website is good for getting an idea and I recall looking at some of the banks who also have mortgage calculators to give you an idea (just don't go for the offer in principal as this would be an actual mortgage offer). We used London and Country (as they're free) for an offer in principal a year before we bought, with a view to buy, and was offered £180k as the highest mortgage. It took ages to find a house though and in the end we decided a broker was the best option. It was for us.

eurochick · 04/03/2018 07:56

Can you increase your saving rate to build up a bigger deposit? When I earned 60k I was saving at least a grand a month, more like 15k a year. I wasn't living frugally. Can you work out where all your money is going?

NeverTwerkNaked · 04/03/2018 08:04

Agree, the more you can pack away in savings/ debt over payments now the better the mortgage choices you can have. Not only in terms of amount you can borrow, but also in terms of the interest rate you will get.

Grobagsforever · 04/03/2018 08:04

I don't think you can buy as you have zero deposit really after stamp duty and legal fees. Took us 7 years to save 30k, it's not easy

superram · 04/03/2018 08:05

Your partner’s outstanding debt will be taken into account and reduce affordability-all debt will be including student loans, etc.

peachypetite · 04/03/2018 08:07

All banks have a mortgage borrower calculator on their website.

19lottie82 · 04/03/2018 09:59

5% mortgages are possible but the rates aren’t usually great and you also need to have an impeccable credit history.

If maybe spend a year clearing your DPs debt and saving for a deposit. £60k is a decent combined income, so unless there’s something you’re not telling us, there shouldn’t be a reason why you can’t? That’s over 3k left after your rent each month?

Head over to the money saving expert forums, and look at the debt free wannabe page. Even though debt isn’t your main concern here they’re great in helping you put together a realistic budget and work out where you’re going wrong.

Also just a quick note to advise that lenders won’t accept loans as deposits, your PILs would usually need to sign a disclaimer stating that it’s gift, not a loan.

Original poster
Lotsofsausage · 04/03/2018 10:16

Thanks all. Will definitely check out MSE website. I feel a bit embarrassed that I don't know where to start with this! To answer questions, yes I could probably save a bit more PCM, although we do live in an expensive part of the country where even food/ transport all costs more. But it would just be me saving, partner earns significantly more than me but is paying off debts so he can't add to the savings until debts cleared. I put away a couple of hundred PCM, anything left over at the end of month, and any birthday money etc. But I have dipped into it for holidays/ car service which I will stop!
One of the considerations is looking at buying in a different (cheaper) area so less deposit needed..... but then there's the risk we wouldn't be earning as much, up not for example, so not sure if this would be factored into the banks decision? i.e. they approve mortgage on the wages you're currently earning but to move to area you're buying to take a pay cut iyswim.

OP posts:
19lottie82 · 04/03/2018 10:26

If you’re going to buy a house together then you need to work together. If your partner is earning a lot more than you then he must be on a good wage, and how much of it is actually going on paying off his debt? Is all his spare cash really going on debt payments, or is he just paying off a small amount and spending the rest, rather than saving? Is he still using the cards? (Sorry I’m in MSE mode now!)

You need to sit down together and work out a joint budget, but again, it has to be realistic. That’s where money saving expert will be able to help.

They also advise a technique called snowballing to pay off debt, which is really great in helping you get everything paid off in the shortest time possible, while paying the least amount of interest.

Re the area / mortgage. I’m guessing you couldn’t move to a cheaper part of the country and keep your current jobs? Banks aren’t daft. They will ask this and aren’t likely to offer you a mortgage based on your current wage if you’re planning on moving to a job with a lower salary.......

NeverTwerkNaked · 04/03/2018 10:29

Yes i’d Be asking some searching questions about his debt and the rate he’s paying it off? it sounds like you are serious about starting saving, but is he?

ShowOfHands · 04/03/2018 10:32

Our mortgages were done on affordability, not income. This is becoming increasingly common. Multiples of income are irrelevant when one applicant is child and debt free and another has debt, two families and expensive investments, yet both have the same income.

peachypetite · 04/03/2018 10:34

Could you rent somewhere cheaper to enable you to save more? Would it be an option for either of you to look for better paid job?

Original poster
Lotsofsausage · 04/03/2018 11:05

You're all right - I feel like it's just me driving this. I don't even think he'd be paying off his debts if I hadn't insisted. Had a conversation with him this morn re saving for a deposit and he doesn't seem fussed about it even though he's only got a few months of credit card payments left @500 pcm so realistically in a year or so we could have saved a decent deposit together if we are very careful with spending.
I might look into investing with family members in a cheaper part of the country where they live, I'm not hanging around forever. My brother is looking at a buy to let property, maybe that could be mutually beneficial for both of us. thanks all.

OP posts:
JoJoSM2 · 04/03/2018 11:29

If you haven’t got children, then frankly you’re in a great position to save loads and buy. Friends of mine earning a bit less than you just got a 2-bed in London last year (and didn’t have any help with deposit or anything). The biggest problem is your partner to be honest.... If he’s the higher earner and has credit card debt than I’d be questioning if he’s the type to ever get on the Property ladder.
By my calculations, as a couple you should be able to save 1.5k/month - less debt payments.

specialsubject · 04/03/2018 12:35

doesn't sound a great person to get tied to financially unless his attitude changes.

be careful with BTL, other threads refer.

good luck!

greendale17 · 04/03/2018 12:38

It is all about affordability and risk now.

Pay off all the debts first

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