How much deposit will you need?
by Admin
Posted on 21-11-2022 08:35 AM
Q my partner and i are hoping to buy our first home around this time next year. While we will have a (hopefully) decent deposit of £25,000 behind us and we both have a strong credit history, there is a chance that i will be starting a full-time phd around the time we make an application for a mortgage.
The phd would be funded by a grant that would provide me with £15,000 a year tax free to live on as well as covering my academic fees. My question is, would a mortgage provider accept this grant as income rather than a salary? would my not being technically employed pose any problems?.
In short: both of us had spent a considerable amount of time building up considerable savings. It was helped a bit by living cheaply since march last year with my girlfriend’s family but in actual fact we’d have been on track with our previous savings rate back in london. Last year i put together a bit of a financial summary for 2019 which you can read here: my personal finances report for 2019. None of our deposit was gifted or lent to us by family/friends which we’re both pretty proud about. Even if buying a property isn’t on your mind, i still think everyone should be aiming to save money: financial freedom: why saving money could help you find a career you love.
It would not surprise me if you were able to find someone willing to lend money to you in your situation but a word of caution. If mainstream lenders are all saying no, you should think very carefully about their advice. After your deposit is paid, if you need to borrow less than 3 times your salary (not joint salary) and can survive interest rates of 5 or 6% then this is sensible. If you are relying on both you and your partner earning and/or need to borrow much more than 3 times your salary then you should be extremely careful.
If you’ve just left university then the chances are that you’re somewhat short on cash, in a lot of debt, and potentially overwhelmed with the stress involved in moving out and starting a career. Luckily, some mortgage providers who are aware of all of this are offering loans designed to suit recent graduates. These mortgages might come with free perks and discounts and are available with loan-to-value ratios of up to 95%, meaning that very little up front deposit is required. You’ll need to hunt around to find these mortgage deals as many conventional mortgage providers will steer clear of recent graduates, who they see as very risky investments, but they do exist and they can be found.
How To Get A Mortgage On A Low Income
I'm strongly considering buying a house, and would appreciate advice from anyone more familiar with the mortgage process than i am. My situation: i'm married, 27, and my wife and i are both phd students. We both have excellent funding, and thus stable income for the next few years ($35k/yr each). We plan to be in the same city for at least another 4 years, and the high demand for rentals here means that we shouldn't have trouble renting a house out through a property manager in the future.
We plan to own it for the long-term. I have always saved 50% of everything i've earned, so i have savings of ~$300k in a roth ira, cash, mutual funds, and stocks.
At over 6 x income, i'd say your chances are slim and none. Lodger income won't be taken into account as you have no history of receiving it. Sorry. I am a mortgage broker. You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as i follow mse's mortgage adviser code of conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send pms asking for one-to-one-advice, or representation. 3 february 2015 at 3:19pm pinknsparkly forumite.