First time buyer mortgages part 2

How much mortgage can you get with a £20,000 deposit?

£20,000 takes a lot of saving for a First Time Buyer! You will probably need an 85% loan to value mortgage - the higher the loan to value, the more the monthly pay rate will be.

As a rough indication, most lenders will go to about 4X your income, so on an income of £25,000 a target mortgage of £100,000 is about right..

Any credit cards or loans you have will affect this total, as the monthly payments are anualised, then deducted from your income before the borrowing potential is calculated.

If you are a First Time Buyer AND you are on a probationary period, it should not be a problem - although this will limit you to just a few lenders.

I would suggest you get a Decision In Principle (DIP)- this is a cost free exercise, and involves a pre application credit and ID check. The lender will then indicate the amount they would be prepared to lend you. (this is not a gurantee of a mortgage, but it gives a good indication that a full application is likely to be successful)

A DIP also enables you to be in a strong position when it comes to making an offer – it shows you are serious and have an interested lender.

You might find these blogs useful

http://www.usefulmortgages.co.uk/news/uncategorized/what-is-the-cheapest-mortgage-rate.php

http://www.usefulmortgages.co.uk/news/uncategorized/moving-home-%e2%80%93-my-10-top-tips.php

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