News0 min ago
the nightmare of mortgages for first-time buyers
10 Answers
A mate is self-employed with a fairly steady income of about £12K a year. He's also a first-time buyer but the well-known building society who he's trying to get a mortgage from has still not made an offer after several months. In that time they've asked a million questions, all of which appear to have been answered to their satisfaction. And they've repeatedly set dates they'll decide by, yet never actually come up with an offer. The mortgage broker claims to be powerless to do anything. Is this standard these days, due to the nervousness of lenders following the recession? And, most importantly, can anything be done to make the building society finally come up with an offer?
Answers
Best Answer
No best answer has yet been selected by chirpychirpy. Once a best answer has been selected, it will be shown here.
For more on marking an answer as the "Best Answer", please visit our FAQ.I don't think that already owning a property will have any bearing on their decision. As Buildersmate says, £12K is not a lot of income when looking for a mortgage, most lenders will lend around 3 - 4 x salary so he would only be able to borrow £36K-£48K anyway. How much is he trying to borrow and how much is the property he is looking to purchase?
Has he tried other lenders instead of waiting for the one Building Society?
Has he tried other lenders instead of waiting for the one Building Society?
It's 4x the annual salary then. I would seriously wonder how he thinks he can afford this as a bigger proprtion of a £12k salary than average gets swallowed up in everyday expenses.
It may appear fine in repayments with interest rates around 5% but the long-term average is around 7% - so over 40% hike in mortgage repayments when rates go back up.
Plus he's self-employed - so more at the mercy of market demand for whatever he provides in his business.
When viewed in those terms, it is perhaps understandable why companies are less than enthusiastic. No-one wants to be turfed back out of their property later.
It may appear fine in repayments with interest rates around 5% but the long-term average is around 7% - so over 40% hike in mortgage repayments when rates go back up.
Plus he's self-employed - so more at the mercy of market demand for whatever he provides in his business.
When viewed in those terms, it is perhaps understandable why companies are less than enthusiastic. No-one wants to be turfed back out of their property later.
Related Questions
Sorry, we can't find any related questions. Try using the search bar at the top of the page to search for some keywords, or choose a topic and submit your own question.