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First Time Buyer Q?

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  • First Time Buyer Q?

    Hi,

    We are a couple as first time buyers and have some queries if someone is able to share an opinion.

    We want to buy a flat in London (2 bed - 300k) but after some research we realized that with our salaries most lenders will give us a maximum of 150k.

    Joint salaries are about 40k /year and we have some cash (poket money) from families (aprox. 10k/year) which of course we don't have papers to prove so I assume that lenders will count just the 40k/year.

    We do have 10% in savings so a 90% Mortgage will suit our needs just perfect (e.g. Nationwide were we have main account) but as much as we want it looks impossible to receive that amount.

    At the moment we pay rent 1k/month and after all our calculations(without poket money) we think that a £400/month, £500/month stretch is quite affordable for us.

    What options do we have? Is there such option to guarantee with the flat? or even have a friend as guarantor?

    I know that if you don't pay the mortgagee they can take your house but I'm thinking of an option to guarantee with the flat so it makes up for the salary.

    At the moment we haven't contact any lender because it looks like Mission Impossible; to go for a cheaper Flat is not an option since we want at least 2 bedroom Flat in London and we quite like (so much) the chosen Flat.

    Any help is much appreciated.

    Thanks!
    hDream

  • #2
    Re: First Time Buyer Q?

    No ideas? .
    Some people told me that a broker could be a real help and a friend of mine took a Mortgage(240k) in 2006 with a broker; he had a salary = 20k/year and his wife was without a job on that time. I know that in 2006 was a totally different market and I think that there is no chance to do the same right now but I would like to hear some of your experiences and maybe some new ideas?

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    • #3
      Re: First Time Buyer Q?

      Originally posted by hdream View Post
      We do have 10% in savings so a 90% Mortgage will suit our needs just perfect (e.g. Nationwide were we have main account) but as much as we want it looks impossible to receive that amount.
      If you have a 10% deposit, why are you so sure Nationwide would reject you? From what I recall, they do 95% LTV for Flexaccount holders.

      In which case, you are pretty well placed so far in terms of

      a) deposit
      b) covering mortgage amount

      If nothing else, it's worth having a chat with them, or at the very least with a mortgage broker.

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      • #4
        Re: First Time Buyer Q?

        I'd be surprised if Nationwide would offer 7.25 x joint income, even for account holders.

        Income multiples like that are a thing of the past, I'd say the only likelihood of borrowing this amount is with guarantors in place, and even then probably a struggle unless the guarantors have substantial income.

        I'd definitely say you need to find a good local broker to chat this through with. Ask friends / family for recommendations of trustworthy financial advisers they have used in the past.
        ____________________________________________
        Property for sale in Torquay

        www.thomasdobner.co.uk

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        • #5
          Re: First Time Buyer Q?

          Originally posted by IFA View Post
          I'd be surprised if Nationwide would offer 7.25 x joint income, even for account holders.
          Ah, right - good point.

          These days I'm so used to looking at LTV values I forgot about income multipliers.

          (I am not a mortgage broker. ).

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          • #6
            Re: First Time Buyer Q?

            Thanks IFA and Brian!
            Yes indeed, it looks like a local Broker is the only solution at the moment + a good guarantor . Our credit score according to Experian looks good (over 900) so we may have a chance.

            I'll try to find a good Broker who can give us some advice and see how it goes.


            Thanks,
            hdream

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            • #7
              Re: First Time Buyer Q?

              hello,

              Yep your main problem is gonna be those income multiples, nationwide would go to 90%+ BUT i'm not sure if they except guarantors.

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