Man of Honour
Can Single people with low wages afford a mortgage?
- Thread starter bakes0310
- Start date
Soldato
It's achievable is you have a moderate salary, but not a low/average salary.
A mortgage cost about £500-600/month per £100k borrowed with %30 deposit. That's at today's crazy low interest rates.
Imo you need to be earning at least £25-30k before it's an option. Even then the deposit is a massive barrier when earning so little.
No.
A mortgage cost about £500-600/month per £100k borrowed with %30 deposit. That's at today's crazy low interest rates.
Imo you need to be earning at least £25-30k before it's an option. Even then the deposit is a massive barrier when earning so little.
No.
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Well, how else do you think the buy to letters will be able to pay their mortgages!?This!
I can easily afford mortgage payments and running a house in the local area at just under a third of my net monthly wage with plenty of disposable left over, however...the long slog saving up the 20k I'm aiming to put down as a deposit is a different matter!!!
Lots replys thanks for the feedback its like a proper forum.
I can save (and have) £500 a month so that's £6000 a year, which I suppose aint too bad. Feel a little dishearted some people telling me to giveup as it will be too hard.
Im trying to be a little realistic, if its cheaper to buy a nice flat (seem some nice ones in my area for £75k-£85k) maybe that would be a better option?
I can be pretty patient if I got save for 5+ years then im afraid so be it.
Or if im extra patient wait till my grandparents die, as they have left me there home, but that could take ages (there both 70) unless I start doing the cooking?
I can save (and have) £500 a month so that's £6000 a year, which I suppose aint too bad. Feel a little dishearted some people telling me to giveup as it will be too hard.
Im trying to be a little realistic, if its cheaper to buy a nice flat (seem some nice ones in my area for £75k-£85k) maybe that would be a better option?
I can be pretty patient if I got save for 5+ years then im afraid so be it.
Or if im extra patient wait till my grandparents die, as they have left me there home, but that could take ages (there both 70) unless I start doing the cooking?
Well, how else do you think the buy to letters will be able to pay their mortgages!?
Sorry, can you elaborate? I'm having a blonde moment!
Soldato
If you can save £500 a month, you've got it made, I could only dream of being able to save that much.
A lot of people who rent out houses buy them and then use the rental payments from tenants to pay the mortgage costs each months. Basically it means the owner gets an almost free house (minus deposit and other costs) at the end of it, paid for by the tenant. If rents were less than mortgage costs a lot of buy to letters wouldn't be buying to let as they would have to stump up a large proportion of the mortgage payments.
Soldato
Yes, but they'll often discount it, i.e. not put it into the multiplier for the mortgage calculation.
Example: £30,000 basic at 4 x salary = £120,000. £10,000 bonus on top will not give an extra 4 x £10,000 but just another £10,000 borrowing headroom.
All lenders are different, but that's a decent rule of thumb. Be prepared to provide evidence of consistent bonus.
Soldato
This doesn't work in most areas any more. Rental income isn't generally enough to cover the mortgage. Especially when you factor in that decent buy-to-let mortgages require monthly rental income in excess of 125% monthly payments.
e.g. a £200k flat here would rent for around £850/month. I've just checked and you can't get a buy-to-let without a min 20% (£40k) deposit. The payments on the remaining £160k are £850/month (min), so you make nothing from a £40k investment. And that's before factoring in costs and ignoring the 125% rules that normally apply, and that interests rate will go up.
You need a significant deposit (30%+) to make money these days. Then hope rental increases and capital appreciation mean you can re-mortgage at some point in the future if you need the capital back for your next project.
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Man of Honour
40 hours a week at minimum wage is a take home of £11,287 a year.
So "a little over £5K" from that leaves ~6K a year. £500 a month. Nobody can have a job and live on £500 a month in the UK. You'd have to be homeless to live on £500 a month. So you must have someone else supporting you in order to have been able to save £5K in a year on minimum wage.
I know someone who lives on minimum wage, takes home £11,700 and pays out child maintenance of £400 a month, which leaves him just over £500. He survives, lives in a bedsit and is skint a lot, but he isn't homeless and isn't starving. (I told him to go to CSA who would reduce his child maintenance, but he says no, his kids are his responsibity, and you can't really argue with that.)
Essentially though, its doable, not easy, but doable. Edgey also mentioned he often does overtime, so I suspect that would account for at least a portion of his savings.
As for the thread topic itself, I can see anyone on minimum wage being accepted for a mortgage to begin with, let alone being able to afford the repayments, even with a sizeable deposit.
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Sounds a very good bloke, don't hear someone say that really.
1-Lives at home, paying little to no board.
2-Absolute BS.
3-Works 60-70 hours a week at min wage (fool)
Easy to say if you are sorted.
I save £500 month on low wage of £6.55, but I do live at home so im saving as much as I can, its doable depending on peoples circumstances.
Soldato
Dam good idea!!!
on the same wage as Bakes! and not allowed to work over 39 hours a week
It's impossible tbh!
Hard enough trying to try and save for 20% for a mortgage in the South East (Eastbourne) and thats with around 24k income between 2x people.
Can just afford to rent and live on bare minimum.
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Man of Honour
As I said in the post you replied to:
It's doable if you have someone else supporting you, sure. Nobody's disputing that.
I have very cheap outgoings, I pay my grandparents £160 a month, 35 month gym and spend about £60-80 on petrol that's it.