Mortgage advice- possibly wrong forum

[Juniper904]

Sorry if this is in the wrong section- I wasnt sure where it should be.

Basically, my boyfriend and I are looking to get a mortgage but I'm utterly confused. We have a joint income of about £85,000 and a deposit of £45,000. As far as I'm aware, you can get a mortgage that's 3 times your joint salary, so £240,000. Is that right? And if so, would our deposit be £24,000?

We both have steady and recession proof jobs (doctor and teacher) so I reckon we're safe bets for lenders.

What sort of mortgage could we get? And how do I go about finding out more?! I've looked on Martin Lewis but it seems to be full of technical jargon.

TIA :-)

I would suggest you see an indepent financial advisor (IFA) for advice. They have access to most lenders and can get better deals that Joe Bloggs walking off the street. They should also be free (they make their money from the lenders for introducing you.

The market has changed quite a bit due to the climate and you will find the mortgage will be dependent on the value of the property than the amount you and your boyfriend earn. Some lenders will only lend 80% of the value of your property etc. 90% are hard to come by at the moment.

You have a fair amount for a deposit though and like you say fairly recession proof jobs.

Good Luck :o

I'm no IFA, but I thought it was 3x one salary or 2.5x2salaries (or is it 2 of one, and one of the other....?)

Agree, I've heard lenders are lokking for bigger and bigger % for deposits too.

You best bet really is to speak to a couple of different advisors (or even mortgage lenders) and begin to get a picture of what is being said, without committing to anything.

Glaikit has said it all really. The changes they have made to mortgages of late are confusing even to those of us who have been around the block a few times!

To reassure you though I can't see you having a problem in getting a mortgage. An IFA will talk you through various options but IMO put as big a deposit as you possibly can down, borrow as little as you possibly can and if once you have your mortgage you can afford to do so, pay the bloody thing off as fast as you can (over payments etc) .

I think London and Country get recomended on here a lot as a good place to start, although I have no personal experience of them.

Your minimum deposit would most likely be £24k, because it is hard to get anything more than a 90% mortgage these days.

The larger the deposit you have the better for you in terms of mortgage and interest rates.

Are you allowing for stamp duty and expenses elsewhere or does this also have to come out of your cash lump? That will also affect what you can afford.

sorry - I wasnt clear - I was responding to the £24k figure in the OP, not suggesting that it is an absolute minimum.

The deposit should 10% or whatever % the mortgage lender requires if the purchase price of the house. So if u r buying a house for say £400k and u must have a 10% deposit then you must have a deposit of at least £40k. The £360k balance is what u must get a mortgage for or somewhere else to fund the full £400k. Including fee etc, which willbe approx £15k, I would say u have £30k deposit to put down on house. For 10% deposit u r therefore buying a house that costs £300k and will have to get a mortgage for £270k which is prob achieveable on an £85k joint salary. Whether it is affordable for u is another matter and depends on u , your other financial commitments , spending habits etc.

Molly is very right to mention affordability, what banks want to know that you can afford the repayments and that depends on other outgoings like loans, cars or travel to work.

Using an interest rate mortgage calculator - says £270k mortgage over 25 years at approx 6% (which has been the interest rates average value but of course they can go significantly higher) is £1760 per month.

Another thing to look out for is flexibility. When you first buy a house it is not normally something you can think about, but after a while you might find that you can afford to pay more each month on your mortgage. This is one of the best ways of saving money (as it is tax efficient and also saves you paying interest on your loan) but is hardly ever mentioned by financial advisors because the don't ever get commission on it! Nationwde do fixed rates where you can overpay by up to £500 a month. This was great with my first flat as I was able to have a fixed monthly payment and just made payments over when I could now and then. By the time I came to moving in with DP (now DH) both of our mortgage overpayments meant we had saved up enough equity to afford a bigger house, with not much more mortgage than we had already.

There are online calculators that can work out how much interest you will save over the life of your loan. When rates were higher overpaying by the max £500 pcm would pay off the loan 12 years early and save £12,000 in interest over the term. Finding that our blew me away and now any spare cash gets sent towards the mortgage!

Worth looking into even if you have no spare cash at the mo or can only see yourself overpaying by small amounts as ever penny paid in advance will benefit you. Obviously it only works on Repayment mortgages though!

Thanks everyone- that's all really useful :-)

Many of the better deals with the banks are when you put down a 25 percent deposit.