could we get a 210k mortgage?

[bluearya]

Before i start dreaming could u tell me my chances of getting a 210k mortgage?

we have 55k for a deposit and DP gets 25K a year. I'm on maternity at the moment and don't plan on going back for a while but can always work some hours if we are pressed for cash.

At the moment we rent and pay 650 plus cc and bills without any problems.

So... any chance? Thanks

I would get yourself back to work.
We are paying more in rent than we would to a mortgage and so I am working until we secure the said mortgage of 3 times our joint salary and then I can give up or go part time.
Give the bank what they want to see short term to get what you want in the long term.

I'd also say the days of 25-30 years of mortgage free life, often whilst retired are over, that simply isn't going to happen for our generation so you might as well accept it, over pay the mortgage when you can but we'll be working until we drop. Pensions are legalised pyramid schemes anyway, don't be the fool entering at the bottom now. Not to mention the front loaded charges :-(

I don't see a problem with getting a long term mortgage - we got a 40yr loan which took us up to 65. We did this to be able to afford the repayments during the first couple of years. But we've been overpaying recently which will bring the term down - according to a MSE calculator just overpaying by £50 a month will shave 9years off. Also there's nothing stopping you from choosing a sorter term when you come to remortgage.

That said I doubt any bank will loan you £155k on a £25k salary. I was earning a similar wage in 2010 and could only borrow £130k

*shorter not sorter

I got a London and Country mortgage almost two years ago. I borrowed around six times my 22k salary (had big deposit like OP). It was over 35 years and repayments were around £600.

In September I upped repayments by £50 per month and shortened the term by about six years.

I think it's completely possible. I also think you need to think carefully about your attitude to risk. I'm not very risk averse and am completely confident in my calculations. The mortgage lender started to get cold feet at one point during my purchase but as they'd made an offer I said my solicitor would handle the conversation if they were going to mess me about. I knew the day I bought would be the poorest I'd ever be so 35 years didn't phase me - I plan to up repayments by another £100 p/m by the end of 2013.

Good luck!

There's nothing wrong with taking out a longer mortgage if you are going to be able to significantly overpay and/or plan to remortgage to a shorter term in the future. If not doing one of these things you will pay a fortune in interest.

The problem is that you also need to be able to cope with future interest rate rises. So, as an example, the person who takes a 35yr loan for 160k at 3% will be paying £620pcm.

They may expect to have another £150pcm available when the second person returns to work allowing them to remortgage to a 25yr product @~£760.

However can they manage to swap to a shorter product and handle higher rates, e.g. a 25yr product fro 150k @25yrs is ~£980pcm?

Basically, if you stretch yourself now in terms of loan duration, at a time of record low interest rates, you haven't much contingency unless you have a solid plan to hugely increase income.

A whole persons salary is a pretty decent increase usually wouldn't you say ?

Some of us on here remember scrimping to pay a £50k mortgage at 15% interest - FIFTEEN percent..... so would not contemplate borrowing at full stretch when rates are at their lowest ever just in case

Thanks for all your answers.
I could go to work sooner but by the time i pay nursery fees after school care and transport.... i wont be much better off.
My DP gets service charge on top of the 25k but it changes every month and its hard to predict.
Could also try the bank of mum and dad to up the mortgage (a little reluctant to do that though)
Would a garantor help? Don't know how that would work.

I would start overpayment or remortgage when back at work, thats why i was thinking of having it fixed for 2/3 year (easy to budget).
I have money aside for stamp duty and maintenance. And i'm expecting to increase income in the future.

DontmindifIdo thanks but can't take all the credit, some of it was inherited and the rest i have worked since early and saved most of it before the DC.

The question is not if a could afford it, its more if any one would take the risk of lending it to us.

Thanks for the London and Country tip i will talk to them. I am really in love with the house.

If not we'll just wait longer and hope prices don't go up.

Our house was £200k we had £40 deposit so mortgage of £160k. A five year fixed rate 35 year mortgage. Our repayments are £820 a month

We earn £46k between us, although our childcare bill is £400 a month and we do struggle. Haven't been able to do anything to the house had to furnidh it with handmedowns and wbay bargains. We dont do much fun stuff and havent had a holiday for 6 years

Honestly, even of you could, in your position I wouldn't

Could anyone help you with the childcare to keep the costs down ? That would be a better gift than cash from your mum and dad really.
I'm sure a guarantor would help but how comfortable do you feel asking for somebody to put up their home as security ?

I honestly think as long as you take out insurance against job loss you'll be fine.
Everyone told me in 2001 not to buy a house, it's too tight for you financially, you're only young etc etc. Luckily I ignored them all.

I agree with BytheWay1. Many people in the early 90s came unstuck and regretted the big risks they took when they couldn't afford the repayments because the interest rates were at a ridiculous level, their homes got repossessed and they ended up in homeless shelters.

Mortgage rates were at 15% for one day drives me potty when that old chestnut is trotted out, DH had a £46,000 mortgage at the time and yes it was worrying but he survived as a single bloke who no bugger was going to bail out if the worse happened.
It's been quite clear for the past 5 years interest rates are going nowhere.

You would probably be able to do a non status mortgage with a non high street lender if your credit rating is good.

If you can go to 30% deposit then definitely yes.

Do you have a seperate "rainy day" fund as well as the £55K? (currently recommeded to be 12-18 months living expenses given the job market) What about the fees associated with buying - have you a savings pot for that? Will obviously vary, but Im Nervous Nora and would have £10k set aside for that. Anything left will be a nice new sofa set etc.

I havent read the whole thread, but advice I heard years ago was, whatever the mortgage repayment looks like, add a third on for extra costs. Can you afford that? Can you still afford it if the interest rates went up to 12%? If you think you can, start putting aside whatever the amount is, minus current rent. In a year if you have been able to do it without struggling then you will have a nice top up to your deposit (well done on that so far btw) or money towards fees and rainy day fund. :)

I took mine out at 10.65% in 1991 ish - and it went up to 11.5%

Whether the scary figure is 8%, 10% or 15% it doesn't really matter if it is unaffordable.

We are talking a 35 year commitment here - are you feeling THAT lucky!

Mosman - they have gone nowhere for 5 years, but a mortgage of 25-30 years is a whole different story!

OP - while you wouldn't get to keep much of your wage if it was all taken up with nursery fees, it's not the increase to your disposable income that would effect what they will lend, but the total increase to your family income. So even if every penny you earn was taken by fees and transport costs, they would still when doing the multiples of what they would offer look at both yours and DH's wages. So if you could get a £20k job, with a £50k deposit, you should easily be able to borrow the money. (You would, however, need to have the job for at least 6 months)

I do, however, echo the others, interest rates can go up - we did our sums on assuming they could go up by 5-6%. That's usually a safe buffer.

Mosman - while I agree it's unlikely that interest rates will go up to 15% in the next 5 years or so, it's not unreasonable to assume they will go up at least 1-2% in that time frame, a lot of people can't afford that. a 2% increase would push a large number of people over the edge at the moment.

And there will be no wage increases or inflation over 25 years either ? Given that its clearly the intention to inflate away the debt you'd be sorry if you missed out on the opportunity tbh

London and country have a calculator here

Good luck, they were useless for me, but then I'm self employed.

A lot of places look at affordability rather than salary multiples so childcare fees would be taken into the equation. Even my pension contributions reduced the amount we could borrow

People didn't lose their homes because the interest rates were 15% for one day on black Wednesday in 1992. It irritates me when people today are so dismissive of that period of time as it means lessons arent learned. Actually, in 1991, 75,000 homes were repossessed by the banks because in summer 1988, the interest rates were 7.5%. By the end of that year they were 14% I think. And they stayed at 14 or 15% all the way through 1989 and1990. People couldn't cope because they hadn't factored in interest rates rising very quickly over a 6 month period and then staying at that crippling level for 2 years. They struggled to pay the mortgage during those years by which time the banks had had enough and went to court repossessing the homes and panic selling them off cheaply meaning that families were still saddled with the debt.

The lessons learnt were that everyone now has endemity I durance do the banks cannot loose and would therefore rather pw

people stayed in their own homes than handed back the keys and went bankrupt - am option that wasn't readily available in the 90's - because that might crash the property market and then the banks would be really fooked.