Question about mortgages in the UK?

Question

Can someone explain what a 'mortgage' is?

I'm 16, so not moving out just yet.

I'm hoping to move out of my parent's house when I'm a qualified teacher, in 7 or 8 years.

My question is:

If I earn say £20,000 a year with the teachers salary and I save up another £20,000 through University (my parents are paying for the course, I'll have a part time/weekend job), what price house will I be able to buy?

I've always wanted to live in the north of England and in the area I want to move to, houses are around £140,000.

Any help?

Thanks.

Answer 1

I wouldn't worry about this for another couple years, if I were you. I'd concentrate on my studies and grades. Things change rapidly, and at the moment, we're in a credit crunch with a potential upcoming recession. By the time you finish Uni and are teaching, things would have turned around and the advice given to you today may not be viable in the future. Stay with your parents for as long as possible, and save up as much as you can. That will put you in the best possible position in the future.

Answer 2

save 20 grand through uni, are you planning on being a big time drug dealer

Answer 3

So you would need a mortgage of £120,000. You would have repayments of £800.00 plus per month for 25 years. Big commitment

Answer 4

Dont worry about it now, wait till ur moving out!!!

Yeh save now but doubt u could save 20 grand!! Esp being a student.  

Answer 5

Mortgage is when you borrow money, on a long term to purchase a property. The lender secures the loan on the property so they have got a legal claim on the property until the loan is paid off. If things go wrong, and you are unable to pay the loan (payments) lender may take legal action which could result in you leaving the property and them selling it off to get their money back.

If you wer looking at doing it today, you will have no problems. I am sure that you are aware (through news etc) that mortgage market is changing on almost weekly/daily basis at the moment. If you look at the cycle, it lasts about 3 to 5 years, so my guess is that you will be fine in 7/8 years time. Sorry, cant give a more definitive answer as in todaysmarket we do not know where things are going to be in the near future.

By the way, well done on thinking about the future, I am sure your parents are proud of you.

Answer 6

I agree with the last answer. In 7-8 years, the price of the properties will be different, mortgage product will be different...and your life will be different...boyfriend, aspiration...

However, it is very noble to worry about such things now.

To have a better idea, check here:

http://www.financecomparator.co.uk/first...

http://www.financecomparator.co.uk/mortg...

Answer 7

in about 7 or 8 years everything will be different so i`d wait untill you are closer to the date

Answer 8

It'a difficult to say what will be house prices in 7/8 years.

Answer 9

you will be in £20,000 debt more like after uni!!