Mortgages

First Time Buyers

Before you begin searching for your first property it is important to be sure of the amount of money available. It is a pointless and time consumming pastime looking for properties which will in the end be unavailable to you. The best way to ensure that you are getting the best possible deal is to approach several lenders, or a no-fee broker.

The rule of thumb used to be that most lenders will lend you three times your gross annual income. If you are entering into a joint mortgage arrangement then that changes to either two and half times both your incomes or three times the income of the highest earner, plus the income of the other applicant. Always consult a fees free independant mortgage advisor who will point you in the right direction.

Help with your Mortgage

Many people today find that a helping hand from parents is invaluable. Parents are often happy to act as guarantors for mortgages and although this may seem an act of kindness it must be remembered that they will be liable if mortgage payments are not met. First Start from the Bank of Ireland counts as a joint mortgage because first time buyers can borrow up to four times a parents income on top of thier own. Another option is to buy with a stranger. There are organisations that will introduces potential buyers to one another.

A lodger may also come in handy if that spare room looks empty and wasted. Under the 'Rent a Room' scheme from the Inland Revenue the first £4250 you earn from your lodger is exempt from tax. Bradford & Bingley have a rent-a-room mortgage that takes into account the rental value of the spare room when working out how much you can borrow.

 

 

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