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Thread: Mortgage Question

  1. #1

    Mortgage Question

    Morning All,

    Dream house has come for sale. We know that we can afford, but the question is whether a lender would feel the same. I thought Iíd ask here because Iím aware that intermediaries may have access to more specialist products. Essentially weíre after a little over 5 x our combined salary:

    Combined salary - c. £125k
    Lending required - c. £670k
    LTV - c. 88%

    Appreciate that lenders have their own lending requirements, that all mortgages are subject to affordability checks, etc. Iím also aware that lenders are restricted in terms of the number of products they can offer at 5x or more combined salary.

    In principle, though, are there likely to be any potential products out there without punitive interest rates?

  2. #2
    Master vagabond's Avatar
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    Is your age/the term of the mortgage, also a consideration in this situation?

  3. #3
    Quote Originally Posted by vagabond View Post
    Is your age/the term of the mortgage, also a consideration in this situation?
    Should have mentioned that.

    Iím 40, my wife is 39. We have no dependents and neither of us will be retiring before weíre 67.

    Our salaries will also increase over the next few years so the affordability will ease. Thatís difficult to evidence I appreciate but we are comfortable with this.

  4. #4
    Grand Master Dave+63's Avatar
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    Iíd speak with a good mortgage advisor; the LTV is high as is the loan/earnings ratio. Both of which will work against you.

    A decent advisor may be able to find you something but it will probably be considered a high risk so will attract a higher than normal rate of interest.

  5. #5
    I agree, speak to an advisor as they will know whatís about and which lenders are more likely to lend in your circumstances. We have always used London and Country and found them good.

  6. #6
    Master Maysie's Avatar
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    As others have already said, speak to a decent mortgage advisor.

    It would also be worth spending an hour or so on Excel before you see them to produce a realistic financial expenditure plan for the year and 'average it out' over the month. It will help to focus the mind as well as produce the answers required or the affordability check questions you will be asked. Include all the usual stuff you spend, including the niceties, and be realistic. There are loads of templates available online which can be tweaked to suit your own circumstances.

  7. #7
    Recently I have been told several stories regarding Mortgage affordability, in all the cases the mortgage lender had a completely different opinion of what the borrower could afford, they made one of them extend the term by five years because of his journey to work.

  8. #8
    Master
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    Quote Originally Posted by Dave+63 View Post
    Iíd speak with a good mortgage advisor; the LTV is high as is the loan/earnings ratio. Both of which will work against you.

    A decent advisor may be able to find you something but it will probably be considered a high risk so will attract a higher than normal rate of interest.
    Spot on I'd say.

  9. #9
    Master
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    On the same income and with a 60% LTV we couldn't get more than about £475,000 on our property in Essex. Didn't investigate whether I could have got more with a significantly worse interest rate.

    We also had a BTL which appeared to knock about £20,000 off our possible lending. We applied for the maximum available.

  10. #10
    Master
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    Quote Originally Posted by Dave+63 View Post
    Iíd speak with a good mortgage advisor; the LTV is high as is the loan/earnings ratio. Both of which will work against you.

    A decent advisor may be able to find you something but it will probably be considered a high risk so will attract a higher than normal rate of interest.
    Indeed. Pretty sure youíll be able to find something but at that LTV any lender will see this as very risky, however you frame it. If one of you did lose your job how many mortgage payments would you be able to meet?

    Personally, a mortgage of that size with so little equity would terrify me!

  11. #11
    Quote Originally Posted by Peck View Post
    Indeed. Pretty sure youíll be able to find something but at that LTV any lender will see this as very risky, however you frame it. If one of you did lose your job how many mortgage payments would you be able to meet?

    Personally, a mortgage of that size with so little equity would terrify me!
    I take your point but as a doctor employed by the NHS and with a wife who has a tenured contract as an academic in the HE sector, unemployment isnít a big fear. Iíll health on the other hand is, and without going into too much detail we have policies to cover us in that eventuality.

    In all likelihood our incomes will be significantly higher in 5 years and we are prepared to take the risk in the interim.

    If anyone can recommend a mortgage advisor then Iíd be happy to take their advice.

    Thanks for the replies so far.

  12. #12
    Master
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    Quote Originally Posted by j0hnbarker View Post
    I take your point but as a doctor employed by the NHS and with a wife who has a tenured contract as an academic in the HE sector, unemployment isnít a big fear. Iíll health on the other hand is, and without going into too much detail we have policies to cover us in that eventuality.

    In all likelihood our incomes will be significantly higher in 5 years and we are prepared to take the risk in the interim.

    If anyone can recommend a mortgage advisor then Iíd be happy to take their advice.

    Thanks for the replies so far.
    Well your employment situation will certainly support your case - good luck I hope you find a decent deal!

  13. #13
    £3.2k pcm for 25 years @ 3% - ouch

    £4k+ pcm if mortgage rates start rising.

  14. #14
    Hi John

    The restriction for lenders is 15% of their lending cannot be over 4.49 x income. For your type of employment there would be no problem exceeding the 4.49 cap and you will be fine. Unless of course you have 8 kids and few ex wife's in the background all requiring heavy maintenance hahaha
    Andy

  15. #15
    Iíve sent you a pm

  16. #16
    Thanks for the advice and comments and PMs so far. Really helpful and please keep them coming.

  17. #17
    Master Red Steve's Avatar
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    Happy to offer some help/advice.

    Registered mortgage broker FCA number 491771

    Can pm you if you like with absolutely no obligation.

    Regards,
    Steve.

    Sent from my SM-T800 using TZ-UK mobile app

  18. #18
    John,I think youíve lived in 3 places since I first met you ,thereís these things called caravans that you can move around,take to your preferred location


    Sent from my iPhone using Tapatalk

  19. #19
    Quote Originally Posted by mk1974 View Post
    John,I think youíve lived in 3 places since I first met you ,thereís these things called caravans that you can move around,take to your preferred location


    Sent from my iPhone using Tapatalk
    I know! I know!

  20. #20
    Quote Originally Posted by Red Steve View Post
    Happy to offer some help/advice.

    Registered mortgage broker FCA number 491771

    Can pm you if you like with absolutely no obligation.

    Regards,
    Steve.

    Sent from my SM-T800 using TZ-UK mobile app
    Thanks Steve - PM sent

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