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buying a house

MixBotMixBot Posts: 8,656 Automated Account
how do mortgages work?

my fella has suggested that we buy a house together in the next year or two. i say 'suggested' as its a super big move and it depends on a number of things - ie - how things go in our relationship!

thing is, he already owns a house and has paid about £50k of it off.

how do mortgages work if one party already has a house? my boyfriend would sell this house obviously then buy a new one. would the £50k be transferred to his new mortgage? obviously, he'd get a co-hab agreement drawn up on the money he's lready paid.

and how much do mortgage lenders lend? is it 3 x single salaries and 2.5 x joint salaries? does it matter if you have debts on credit cars and stuff. i have about £4k on credit cards and a £3k loan but i haven't missed any payments so my credit history isn't bad or owt.

all this mortgage and grown up stuff is confusing :grump:
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  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    You need to speak to an IFA.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    When he sells the house he has to give back the mortgage company what he still owes them and then he gets to keep the rest so for example:

    He bought a house worth £200K
    Out of this he gave 10% £20K
    And borrrowed the rest £180K

    He now sells the house for £230K
    he has to pay back what he still owes (£180k-50) =£130K

    Which means he has £100K for the next house
    If you earn £20K a year and he earns £40K per year you can normally borrow 2.5 - 3 x your joint salary = £150k - to £180

    Which means you will have £250 - £280 to spend on your new house

    I hope that makes sense - when looking at mortgages though yuour question should always be how much can i afford to pay back per month not how much can i borrow
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