another mortgage query

BlueIsland

another mortgage question. I was reading thread of guy who has big credit card bills and it got me thinking. I have been half depressed for past while thinking about my finances.
I have one credit card - 900 euro on it and never missed paying it.
I now have one loan which I pay 280 a month on (never missed it).
I dont have rent worries or that.
My problem is bloody savings. realistically all i have is about 2 grand.
what is my best approach- save and save for next few months or go to bank maybe look for 100% mortgage/ I am a secondary school teacher so people have been telling me that is great when applying for a mortgage etc.what do people think?????

dotsman

Clear all your loans before applying for a mortgage (critical for your DSR) Increase the repayments if necessary. After that, put whatever percentage of you monthly salary you were using to repay the loan into a savings scheme for some time.

With the Credit Crunch, banks are getting more stringent with their criteria and really need to see that the customer has both the means and the financial control to finance a mortgage. The job security of a secondary school teacher (or any public sector job) will always work in your favour (as long as you are permanent and not on contract). However, 100% mortgages are becoming more difficult to get. Do you have parents who can lend you some of the money and act as guarantor on the mortgage?

Work out a monthly budget of what you think you spend at the moment and examine it every month to see if you are actually spending all you money on what you expect. Go into detail on the budget - ie, groceries/eating out/public transport/taxis/alcohol/cigs/clothes/cds/dvds etc. See what can you realistically cut back on and what do you definitely need. What can be swapped? (ie less taxis and more buses, less drinking in pubs/clubs and more having a few tinnies instead, cooking meals as opposed to pizza guy/eating out). It's incredible how much money flows out of our wallets on things we really don't need/want.

Hopefully, after a while, you'll have your debts repaid, a much healthier savings balance (2K is a bit of a joke! - even with a 100% mortgage, this will barely cover your solicitor fees, let alone management fees and furniture etc) and also be able to convince the lender that you are able to handle yourself financially and prioritise your outgoings.

ther27

I think that you should postpone your mortage plans for say 2 years and really get into savings mode. This can be done-it's just a different frame of mind. I used to spend loads on travel but have really cut back. I think you would really need around 20-30000 to feel comfortable as I am sure that you would hope to furnish the house yourself.

unclebill98

TBH not having savings is not a big issue. Its all about your ability to repay the purposed mortgage. Why postpone anything...!! If you want to get a house, no bank is going to say no cause you simple don't have savings..

You might be asked what you do with all your wages, simple because you don't have any sayings... but its not going to be a negative.

Most of the mortgages i do the people don't have thousands in savings. They still get the mortgage. Yes you'll need to get the cash for fitting out the house with furniture etc and then theres your solicitors fees etc.

But there are far more important criteria than savings.

bobk

It's very unlikely that you would get 100% mortgage to suit your requirements.

At present there is only one lender that would give you 100% and they would not give very much. They will possibly lend 4 times the amount of your income.


if you are serious about buying a house, then saving is going to be the only way to acheive this.