So, my questions are: I am a lone applicant & I earn 55-60k, will a bank entertain me?
I don't think so, at any rate not for another year.
Do i need to consider Variable rather than fixed rates when drawing down on my initial mortgage?
We all do, but you I don't think it'd be best, there are penalties involved with fixed mortgages which mean they are very inflexible.
Do i need 10% savings or can i use the strength of the equity alone?
It is possible to use equity.
Stamp Duty?
Possible clawback, or investor rate stamp duty on the second apartment.
Any other areas i need to consider before i make an offer for a 2nd property?
Piles of tax issues - see property investment.
Lads/Ladies,
I apologise if I was a little short earlier. There are numerous things to consider here.
Flyer - you first:
You do not actually own anything or have any equity, you will not have any equity until you can satisfy a bank that the property you own is worth what you think it is. (at present, you don't own it and will not own it until you have completed the purchase). It's difficult to make comparisons with other developments locally because:
a) Stamp duty considerations - this will be payable on yours by a purchaser so deduct that
b) If there's plenty of new apartments on sale in the locale they are more desireable than a second hand apartment, so deduct some more from your prospective valuation.
Then when you have a valuation - say 340K, you paid 250K, your income is 55K. Therefore 90K equity with an income of 55K - say net income of 38K, monthly is 3200, essentially a bank will support total mortgage repayments of about 1400 max, you will get credit for about half of the rent you think you'll bring in say 850 per month - half of this is 425, bringing you with income to service mortgages of approx. 1900 - you're on your own from here, but you can figure out how much of a mortgage that'll give you - i don't reckon it'd be too much, and I also don't think a bank would touch you - whilst they may be greedy, they don't want to expose themselves too much to smaller apartments on the peripherary of the city.
Keyser, your problem is more straightforward - why don't you start to make capital repayments towards your mortgage, interest only is for investors, not buyers. I cannot see a bank touching you unless your gf has a very large income. Why the rush to become a property mogul, the market is high, the fundamentals may not support much more. For further info go check the daily rants we all have on 'the great financial debates' section!!