Case Studies 2
Michael, Jason and Alan wish to buy a property. Michael earns £25,000 a year and has savings of £7,000. Jason earns £20,000 a year, and has savings of £7,000. Alan is on a basic wage of £16,000 but he is paid commission irregularly of £1,000 per month. They both have student debt of £9,000 each. All three are looking to club together to buy a property. They wish a property in the region of £250 - £300K.
Solution
Not many lenders allow three people to get a mortgage together, and if they do, only a handful with use more than two of the incomes. The friends are short on income so they need to find a lender who offers very high income multiples, this reduces the chances of getting a cheap interest rate. They only have £14,000 as a deposit
Our Mayfair consultant would probably look to Halifax to place this case. Using its affordability calculator, we managed to get to an expected loan agreed of £209,000 with £3,000 to cover costs. This would give a purchase price of £220,000.
Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.
The overall cost for comparison is 7.1% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. There may be a fee for the mortgage advice. The precise amount will depend on your circumstances, but we estimate it will be 1.5% of the loan amount with a minimum fee of £500 added on to the loan.
Mayfair Consulting Limited is an Appointed Representative of The Mortgage Times Group Limited, 279 Tottenham Court Road, London , W1T 7RJ , which is authorised and regulated by the Financial Services Authority no. 303007.
