Home | Links | Contact Us | Press | Post a job | Bookmark
Search Available Jobs:
Home Latest press releases ShalI-I-start-a-pension-or-buy-a-house


 Commercial Real Estate Opportunities
Several openings in commercial real estate industry!  Current openings including the following:...


 Credit Clerk
CREDIT CLERK Moore-Handley, Inc. has an opportunity for a Credit Clerk to join our Team in Pelham, ...


 test
PROVIDER=SQLOLEDB;PROVIDER=SQLOLEDB;PROVIDER=SQLOLEDB;PROVIDER=SQLOLEDB;PROVIDER=SQLOLEDB;PROVIDER=S...


 Policy Services Representative ASAP
We are currently recruiting a Policy Services Representative for our client, an insurance ...


 Project Support Representative
Project Support Representative ? This position provides support for our technical services group ...


 Executive Assistant
Multiple Birmingham companies are seeking qualified and experienced executive assistants to report ...


 Data Entry
Seeking experienced data entry clerks to work in the Inverness/Hwy 280 area.  This is a long ...


 WE NEED ADMINISTRATIVE AND CUSTOMER SERVICE SKILLS TO HELP US GROW! MAKE UP TO $40 - $100K+ A MONTH!
Want to Create an Extra Income Stream?Do you have Entry Level Administrative Skills?Put those S...


 Office Assistant
Well established company in Birmingham seeks an organized, dependable and detail oriented full time ...


 Customer Account Representative
You can have advanced technology and part of the most extensive all-digital wireless network in ...


 ShalI I start a pension or buy a house?

Colin Whitaker
Age: 27
Lives: in South London
Occupation: TV researcher
Earns: c.?25,000 a year
Mortgage: None
Debts: Student loan
Investments: ?3,000 in bank account
Pension: None
Aims: To move into home ownership and start a
pension

Few first-time buyers find it easy to get on to the housing ladder these days, but for Colin it is even more difficult because he is a freelance worker.

Colin works as a TV researcher - for the last few months on ITV's Pop Idol programme.

He started in television after doing a degree in European Studies with French and German at Manchester Metropolitan University four years ago. He explains: 'I started off as a runner, making tea and coffee, and worked my way up to be a researcher. Now I am a senior researcher and am hoping to be promoted to associate producer before long, which will mean an increase in my salary.'

He is living in a house share in Battersea, which costs him £460 a month, but he would like to buy somewhere of his own.

'The problem is that the lenders I have contacted want to see a contract with six months' minimum left to run, or similar example of job security. The nature of my work means that I'm lucky to get a contract that long in the first place - the average length is three to four months.

'The fact that I've been in continuous employment for the past four years does not seem to hold much sway.'

Colin's present contract is about to end and he is negotiating his next job. He thinks now could be the time to buy, bearing in mind the lull in the property market.

Ideally, he would like a two-bedroom house in south London, which would enable him to let out a room to help pay the mortgage. He thinks such a property would cost about £150,000. The alternative would be to buy a one-bedroom flat for about £100,000, but he would not be able to accommodate a tenant and he feels he may be stretched with the mortgage on his own.

Colin has savings of £3,000 to put towards his deposit and says his parents would be prepared to lend him more money. His only debt is his student loan of £1,200, which he is repaying at £60 a month. That will be cleared in three years.

He is concerned about his lack of a pension and would like to get that sorted out, too. He wonders whether he should make that a priority. 'Would I be better off pumping all my money into a property and cutting back on a pension, or paying for a pension now, thereby trimming down the amount I can afford towards a mortgage each month? I really do not know what is best.'

Adviser 1: Ray Boulger

If Colin has an accountant who could confirm
his income over the past two years, he could be
considered for a standard mortgage. An
alternative would be to opt for a self-certification
or non-status mortgage. These are not as cheap
and he will need a deposit of at least 10 per cent.

Two good lenders in this area are Bank of
Scotland, which has flexible lending criteria, and
GMAC (General Motors Acceptance Corporation),
which offers non-status loans of up to 90 per cent.

As well as helping with a deposit, Colin's parents
could act as guarantors for the mortgage. This
would mean a lender based its decision on the
parents' finances rather than Colin's. This would
offer better value and Colin could obtain a 95 or
100 per cent mortgage.

Which option Colin de cides on and how much he
borrows will depend on how much he can afford.

If he lets out a room, the rental income would be
tax free up to ?4,250 per annum. This would give
him a total income of around ?30,000 a year and,
using an income multiple of four times, a
self-certified or parent-guaranteed loan of
?120,000 would be feasible. A repayment
mortgage of that size would cost ?702 a month,
but Colin needs to remember that unless he takes
a fixed-rate loan, his payments could fluctuate.

With a pension, the sooner you can start making
contributions the better. However, it may be wise
for Colin to defer starting a pension for a couple
of years while he acclimatises himself to paying a
mortgage and to give time for his salary to
increase.

Ray Boulger works for mortgage and financial
adviser Charcol

Adviser 2: David Hollingworth

As Colin is freelance, he is in effect
self-employed. Lenders will be looking for
evidence of employment going forward, but in
Colin's favour is the fact that he has a good track
record of employment over the past few years in
the same type of role. By shopping around, he
should be able to find a lender that will take a
flexible, commonsense view of his circumstances.

Some of the more flexible lenders include Abbey
National, NatWest and Cheltenham & Gloucester.
His own bank would also be a good place to
inquire, as he already has a relationship and
track record with it.

A big factor in assessing his case will be the size
of deposit that he can put down. The larger this is
as a percentage of the property value, the more
likely a lender is to look at Colin's situation
favourably.

Then Colin needs to consider what he can borrow
on his income. A lender will only consider his
earned income and not the rental income he
hopes to pull in. Working on an income multiple
of four times, which is at the upper end of the
spectrum, he will be able to borrow just over
?100,000.

Unless Colin gets together a large deposit, it
would be sensible for him to try to get on to the
property ladder by buying a more modest home.
Otherwise he will be in serious danger of
overstretching himself, which could be disastrous
if he has a spell without work.

He should look to a fixed-rate loan to protect
himself if mortgage rates rise.

Once he has his mortgage sorted out he can
consider starting on his pension provision.

David Hollingworth works for mortgage adviser
London & Country.

· Advice is for guidance only. Do you want to appear in Wealthcheck? Write,
including daytime and evening telephone
numbers, a brief list of circumstances and any
investments, to: Wealthcheck, The Observer, 119
Farringdon Road, London EC1R 3ER, or
e-mail: cash@observer.co.uk. You must be
prepared to be interviewed and photographed.


Related jobs
  Restaurant Manager
Alabama Quality LLC offers significant opportunities for growth and career advancement. We are looking for self motivated leaders to join our team. You'll be surrounded ...
  Good with Customers? Looking for a Professional Environment?
KJC Concepts, Inc.   "Opportunity is missed by most people because it is dressed in overalls and looks like work." -Thomas Edison KJC Concepts, Inc., an ...
  MULTI-UNIT QUALITY CONTROL-TROUBLESHOOTER(CORRECTIONAL)
A VERY FAST-GROWING CONTRACT FOODSERVICE COMPANY SEEKING QUALITY CONTROL TROUBLE-SHOOTER FOR ITS CORRECTIONAL(JAILS/PRISONS) FOODSERVICE FACILITIES IN THE ALABAMA REGION....
  Manager - Birmingham
We're looking for people with: * an entrepreneurial mindset, * a positive attitude, * strong communication and leadership skills, and * who are customer service ...
  BURGER KING RESTAURANTS - Management
Burger King Corporation offers significant opportunities for growth and career advancement. We are looking for self-motivated leaders to join our team and manage a $1+ ...
  Assistant Restaurant Managers
COME GROW WITH US!! Jason's deli is now hiring for our up and coming stores in the Birmingham area. We are looking for people who are looking to join a growing ...
  Retail Sales & Collections
AARON’S …Average General Manager Compensation is almost $70,000?Over 30% of Our General Managers Are Well Over $100,000!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! ...
  Restaurant Manager
WANT TO BE A PART OF THE FASTEST GROWING RESTAURANT CHAIN? We've planned to open 10 new units in 2006 across the U.S. and we are now aggressively recruiting and ...
  Restaurant Managers
Job Description About Santa Fe Cattle Company   At Santa Fe Cattle Co.?, we take our steaks seriously! Many years ago, Jim Bonner opened a restaurant in Santa ...
  Taco Bell Management Opportunities
OPPORTUNITY DOESN'T KNOCK, IT RINGS A BELL!   Great things start with a career at Tacala, LLC. Because this is a place where great people are in great company! We ...

Related press releases
Home loans surge fuels rate rise fears
Low interest rates fuelled a record rise in mortgage lending last month as the start of the spring house-buying season prompted a fresh increase in the cost of property, ...
Pay out extra? Not to this lot
However much insurers and mortgage leaders protest, they hugely over-promoted endowment policies. Even now the industry shows huge arrogance, or perhaps simple ignoranc...
Vital statistics
Philomena Quigley Age 624 Lives in London Occupation Medical secretary Earns £1,542 a month inc £92 pension Mortgage £59,000 Deb...
Q&A: Critical illness insurance
Grim stories about the rising incidences of cancer among younger people has led to renewed interest in critical illness insurance, but what is it and do you need it? Wha...
Ailing Japanese economy runs out of options
International credit rating agencies are about to downgrade Japan's rating to below Botswana's despite howls of protests from the world's second largest economy. It will...
Your options if you're faced with a shortfall
A fifth of the UK population has one or more mortgage endowment policies - which is why the news that many of these will nor reach their target and pay off the loan has h...
Uncertain upturn prompts Bank to put rates on hold
Worries about the real strength of Britain's economic recovery yesterday prompted the Bank of England to keep interest rates at a 38-year low of 4% for the sixth month in...
Showing your assets
Q I am currently researching a best value mortgage for a flat l want to buy with my partner in France. When filling in the application form for the mortgage in the sectio...
Can you repay a loan early?
Q Generally, can you repay loans early? For example, if I take out a bank loan with 48 monthly repayments, but after 24 months my financial position has improved, could I...
Boom's foundations are on the brink of subsiding
Take one small island. Add a large population. Stir in some tight planning laws. Top up with interest rates at their lowest level for four decades and what do you get? Yo...
0.044

Archive: All jobs - Links

Copyright (c)2006 Efbf.org/jobs - All rights reserved