Q&A: Mortgage advice please…i’m new to all this!?
Question by be sustainable where you can: Mortgage advice please…i’m new to all this!?
I have a deposit of around £17,000 and my partner and I earn around £48,000 in total. What can I expect to be able to borrow at a decent interest rate? Thanks for any advice for a first time buyer (any advice beyond this category would be gratefully received!).
Best answer:
Answer by Isa
you find a property, lets say its worth £170,000.
you put down your deposit which is £20,000 ~ (£17,000)
so you payed 20k so far, the price of the house goes down by 20k since you payed that off, now you have to pay 150k.
you earn 50k ~ (48k) yearly. the rule of the thumb is that you can only get a mortgage which is 3 times your annual gross earnings, so:
50k x 3 = 150k
150k + 20k deposit = 170k = payed off
so your bank will allow you to borrow 150k, then you pay the 150k back over 10-30 years. if you take 30 years (the maximum) you will have to be extra interest. so in the end your going to be paying more if you take the 30 year mortgage plan.
you cant just borrow 150k, you have to get it set out as a ‘mortgage’ plan, if you were to borrow; lets say 1k, that’s just know as borrowing money which you pay back over a period of 1 year. but mortgaging allows you to borrow a substantial amount of money with an extended pay back time.
hope this helps.
best regards, Isa
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Short Term Cash Advice
Depends on your credit!
Probably around $ 200,000 – $ 300,000
As a rule of thumb, banks will lend you no more than 2.5 to 3 times your annual earnings. So, something in the 125,000 – 150,000 range. If you don’t have lots of other debts such as car loans, student loans, etc. they might go a little bit higher.