Various House Purchase Questions In One Place
Discussion
Hi folks,
I've posted a handful of times on similar themes but 2017 appears to be the year buying our own home might actually happen thanks to my mother telling me she can give a significant boost to our deposit by way of an interest-free loan. My other half and I are frankly clueless, while there's a lot of knowledge available in the collective PH psyche, so I hope it's okay to put it all in one post rather than flooding this forum repeatedly.
Thank you in advance to anyone who answers any part of this, and I hope that advice given is of benefit to others with similar questions.
(1) How does one work out what they could truly borrow, in order to get an idea of what types of house they might consider looking at buying?
Our salaries are reasonable (I'm on £30k before bonus, he's on £37,500). I own two BTL properties separately and assume their expenditure/income will be considered somehow, but I'm not sure if this is a detrimental affect or not. Neither of them cost me anything personally - all profit and expenditure are kept in a separate account from our daily living costs and once a year I take a slice out of it, usually to pay for something hefty like car insurance, without using our own savings. Our personal out-goings on fixed costs such as rent/utilities/loans are less than half our take-home pay and I track these obsessively in a spreadsheet. In addition to this list, my other half puts £200/month in a help-to-buy ISA.
(1b) The loan from my mum: In her mind she is 'giving' it to us. In my mind, I want to give it back. Do we need to declare this or can it be a 'gift' from her, and then my other half and I just pay it back when possible?
(2) Does this calculation look about right? Have I gone light on legal and associated fees? (The £7,500 box beside SDLT is the additional rate payable due to owning other properties).
(3) When buying a home which requires improvements, what are the chances of getting firstly the mortgage to buy it, and secondly a bank loan to do these improvements?
As an example, this house is on the market locally. It's habitable as it is, but will require work to make it 'home'. Is there a way to simply take a mortgage bigger than the purchase price, or does it have to be a separate loan/funds? Should we look for 'ready-to-live' homes instead?
I've posted a handful of times on similar themes but 2017 appears to be the year buying our own home might actually happen thanks to my mother telling me she can give a significant boost to our deposit by way of an interest-free loan. My other half and I are frankly clueless, while there's a lot of knowledge available in the collective PH psyche, so I hope it's okay to put it all in one post rather than flooding this forum repeatedly.
Thank you in advance to anyone who answers any part of this, and I hope that advice given is of benefit to others with similar questions.
(1) How does one work out what they could truly borrow, in order to get an idea of what types of house they might consider looking at buying?
Our salaries are reasonable (I'm on £30k before bonus, he's on £37,500). I own two BTL properties separately and assume their expenditure/income will be considered somehow, but I'm not sure if this is a detrimental affect or not. Neither of them cost me anything personally - all profit and expenditure are kept in a separate account from our daily living costs and once a year I take a slice out of it, usually to pay for something hefty like car insurance, without using our own savings. Our personal out-goings on fixed costs such as rent/utilities/loans are less than half our take-home pay and I track these obsessively in a spreadsheet. In addition to this list, my other half puts £200/month in a help-to-buy ISA.
(1b) The loan from my mum: In her mind she is 'giving' it to us. In my mind, I want to give it back. Do we need to declare this or can it be a 'gift' from her, and then my other half and I just pay it back when possible?
(2) Does this calculation look about right? Have I gone light on legal and associated fees? (The £7,500 box beside SDLT is the additional rate payable due to owning other properties).
(3) When buying a home which requires improvements, what are the chances of getting firstly the mortgage to buy it, and secondly a bank loan to do these improvements?
As an example, this house is on the market locally. It's habitable as it is, but will require work to make it 'home'. Is there a way to simply take a mortgage bigger than the purchase price, or does it have to be a separate loan/funds? Should we look for 'ready-to-live' homes instead?
romeogolf said:
Hi folks,
I've posted a handful of times on similar themes but 2017 appears to be the year buying our own home might actually happen thanks to my mother telling me she can give a significant boost to our deposit by way of an interest-free loan. My other half and I are frankly clueless, while there's a lot of knowledge available in the collective PH psyche, so I hope it's okay to put it all in one post rather than flooding this forum repeatedly.
Thank you in advance to anyone who answers any part of this, and I hope that advice given is of benefit to others with similar questions.
(1) How does one work out what they could truly borrow, in order to get an idea of what types of house they might consider looking at buying?
Our salaries are reasonable (I'm on £30k before bonus, he's on £37,500). I own two BTL properties separately and assume their expenditure/income will be considered somehow, but I'm not sure if this is a detrimental affect or not. Neither of them cost me anything personally - all profit and expenditure are kept in a separate account from our daily living costs and once a year I take a slice out of it, usually to pay for something hefty like car insurance, without using our own savings. Our personal out-goings on fixed costs such as rent/utilities/loans are less than half our take-home pay and I track these obsessively in a spreadsheet. In addition to this list, my other half puts £200/month in a help-to-buy ISA.
(1b) The loan from my mum: In her mind she is 'giving' it to us. In my mind, I want to give it back. Do we need to declare this or can it be a 'gift' from her, and then my other half and I just pay it back when possible?
(2) Does this calculation look about right? Have I gone light on legal and associated fees? (The £7,500 box beside SDLT is the additional rate payable due to owning other properties).
(3) When buying a home which requires improvements, what are the chances of getting firstly the mortgage to buy it, and secondly a bank loan to do these improvements?
As an example, this house is on the market locally. It's habitable as it is, but will require work to make it 'home'. Is there a way to simply take a mortgage bigger than the purchase price, or does it have to be a separate loan/funds? Should we look for 'ready-to-live' homes instead?
1) Speak to an advisor/ broker......you might think that your BTL's "cost you nothing" but that may not be how lenders assess them when they apply their own stress rates to your figures..............especially at 95% LTV.I've posted a handful of times on similar themes but 2017 appears to be the year buying our own home might actually happen thanks to my mother telling me she can give a significant boost to our deposit by way of an interest-free loan. My other half and I are frankly clueless, while there's a lot of knowledge available in the collective PH psyche, so I hope it's okay to put it all in one post rather than flooding this forum repeatedly.
Thank you in advance to anyone who answers any part of this, and I hope that advice given is of benefit to others with similar questions.
(1) How does one work out what they could truly borrow, in order to get an idea of what types of house they might consider looking at buying?
Our salaries are reasonable (I'm on £30k before bonus, he's on £37,500). I own two BTL properties separately and assume their expenditure/income will be considered somehow, but I'm not sure if this is a detrimental affect or not. Neither of them cost me anything personally - all profit and expenditure are kept in a separate account from our daily living costs and once a year I take a slice out of it, usually to pay for something hefty like car insurance, without using our own savings. Our personal out-goings on fixed costs such as rent/utilities/loans are less than half our take-home pay and I track these obsessively in a spreadsheet. In addition to this list, my other half puts £200/month in a help-to-buy ISA.
(1b) The loan from my mum: In her mind she is 'giving' it to us. In my mind, I want to give it back. Do we need to declare this or can it be a 'gift' from her, and then my other half and I just pay it back when possible?
(2) Does this calculation look about right? Have I gone light on legal and associated fees? (The £7,500 box beside SDLT is the additional rate payable due to owning other properties).
(3) When buying a home which requires improvements, what are the chances of getting firstly the mortgage to buy it, and secondly a bank loan to do these improvements?
As an example, this house is on the market locally. It's habitable as it is, but will require work to make it 'home'. Is there a way to simply take a mortgage bigger than the purchase price, or does it have to be a separate loan/funds? Should we look for 'ready-to-live' homes instead?
2) Looks about right but 3% is optimistic at 95% with two properties in the background.
3) No. You can't take a bigger mortgage than 95% LTV.............any funds will have to come from your own sources or unsecured lending.
Sarnie said:
1) Speak to an advisor/ broker......you might think that your BTL's "cost you nothing" but that may not be how lenders assess them when they apply their own stress rates to your figures..............especially at 95% LTV.
2) Looks about right but 3% is optimistic at 95% with two properties in the background.
3) No. You can't take a bigger mortgage than 95% LTV.............any funds will have to come from your own sources or unsecured lending.
Thanks Sarnie. We're at a point where we want to do this, but don't want to 'waste' someone's time if it's too far away in terms of affordability. 2) Looks about right but 3% is optimistic at 95% with two properties in the background.
3) No. You can't take a bigger mortgage than 95% LTV.............any funds will have to come from your own sources or unsecured lending.
romeogolf said:
Sarnie said:
1) Speak to an advisor/ broker......you might think that your BTL's "cost you nothing" but that may not be how lenders assess them when they apply their own stress rates to your figures..............especially at 95% LTV.
2) Looks about right but 3% is optimistic at 95% with two properties in the background.
3) No. You can't take a bigger mortgage than 95% LTV.............any funds will have to come from your own sources or unsecured lending.
Thanks Sarnie. We're at a point where we want to do this, but don't want to 'waste' someone's time if it's too far away in terms of affordability. 2) Looks about right but 3% is optimistic at 95% with two properties in the background.
3) No. You can't take a bigger mortgage than 95% LTV.............any funds will have to come from your own sources or unsecured lending.
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