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Who gives a 5 times salary mortgage?
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# 1
Milky_Mocha
Old 08-08-2006, 11:58 AM
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Default Who gives a 5 times salary mortgage?

My other half and I are looking to move soon. At a developers' recently we were told that some mortgage providers give a mortgage of 5 x salary. Does anyone know the criteria for this? My partner earns more than me and with a joint mortgage we could comfortably afford the house we want. However his credit rating is not great and we'd be better off keeping our credit records separate. If I'm given 5 x my salary we can avoid a joint mortgage.

Has anyone been given this?
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# 2
UK007BullDog
Old 08-08-2006, 12:46 PM
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They do exist but are mainly for "professionals" i.e. doctors, dentist, solicitors, accountants, highly skilled people and graduates basically.

You also need quite a good credit record.

Best is to check with a whole of market broker.

Off the top of my head I think it is Bank of Scotland and maybe Northern Rock, but with really tight criteria. And some of the fees to get this mortgage from the lenders is also high.

There are some non-conforming lenders as well but the rates are higher.

Maybe a lender which goes by affordability would be better as one can get more that way than by pure income multiples, but only a broker with access to the whole market and give you guidance on this.
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# 3
charlesworth82
Old 08-08-2006, 2:09 PM
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Hi - I went with skipton building society and got just below 5 times my salary. They said my credit rating was low (first job since uni) but it didnt seem to effect anything - just went to head office for their approval.
It aint over 'til it's over
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# 4
missk_ensington
Old 08-08-2006, 2:11 PM
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Im fairly sure Alliance and Leicester offered me 5x when I was getting mine.

Your best bet is going though an Independent Broker who doesn't charge YOU a fee (they get paid by the lender). That way you've nothing to lose.

I know some good ones up north but not down south
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# 5
Debt_Free_Chick
Old 08-08-2006, 3:18 PM
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Quote:
Originally Posted by Milky_Mocha
My other half and I are looking to move soon. At a developers' recently we were told that some mortgage providers give a mortgage of 5 x salary. Does anyone know the criteria for this? My partner earns more than me and with a joint mortgage we could comfortably afford the house we want. However his credit rating is not great and we'd be better off keeping our credit records separate. If I'm given 5 x my salary we can avoid a joint mortgage.

Has anyone been given this?
If you're not married and you want the property to be jointly owned or a tenants in common, you will almost certainly need a joint mortgage. If the property is to be registered in your name only, then only you need a mortgage.

Ownership & mortgages go pretty much hand-in-hand.
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# 6
realwildone
Old 08-08-2006, 3:43 PM
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It is utter madness to get 5x salary mortgage. The reason they give it to professionals like doctors is that they are unlikely to fall on hard times. If you fall on hard times with a 5x mortgage you really are in trouble.

The builders and EA will mention them, but remember, they are not there to help you when you are struggling.
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# 7
adr0ck
Old 08-08-2006, 4:38 PM
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Heritable Bank are worth trying

www.heritable.co.uk
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# 8
mi-key
Old 08-08-2006, 5:53 PM
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Also remember that if you and your OH are currently living together, then your credit rating will already be a joint one, so leaving him off wont make any difference.

Go to a mortgage broker, give them ALL the fact and ask them to see what options are open - could be even with his credit history you can still get a good deal, without getting stung for the really high rates on a 5x mortgage.
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# 9
AndrewSmith
Old 08-08-2006, 6:00 PM
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There are a few lenders who may look at this.

There are always the old favourites such as Alliance & Leicester, Nationwide etc who underwrite on affordability. However recently there have been some of the normally 'specialist' lenders now moving into the prime mortgage market bringing with them not only reasonably competetive rates without overhang, but also income assessment that will allow over 5 x income.

It is based on a 'debt to income ratio' whereby your monthly expenditure on the mortgage and any other loans or debt must not exceed a certain percentage of your before tax monthly income. 40-50% is offered by some lenders based on the deposit available and your overall income/credit history.

Andy
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# 10
meanmachine
Old 08-08-2006, 6:03 PM
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Quote:
Originally Posted by AndrewSmith
It is based on a 'debt to income ratio' whereby your monthly expenditure on the mortgage and any other loans or debt must not exceed a certain percentage of your before tax monthly income. 40-50% is offered by some lenders based on the deposit available and your overall income/credit history.

Andy
Why on earth would you want to spend 50% of your before tax income on a roof and four walls?

And that's "moneysaving" how exactly?
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# 11
AndrewSmith
Old 08-08-2006, 6:07 PM
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Quote:
Originally Posted by meanmachine
Why on earth would you want to spend 50% of your before tax income on a roof and four walls?

And that's "moneysaving" how exactly?
Im sorry I must have missed something.

I don't remember actually recommending that the OP does this I am merely answering his question of whether it is possible and are there lenders who will.

Personally I think anyone who wants to spend 50% of their pre-tax income on a property must be crazy or desparately in love with it.

For heavens sake man don't attack me for simply giving a truthful answer to a Posters question !
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# 12
meanmachine
Old 08-08-2006, 6:10 PM
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Sorry, I wasn't attacking you personally.

And I would have "thanked" you had you included the warning about repossession in your first post.

EDIT: By the way, interest rates have been updated on the A&L website and yet, bizarrely, based on their affordability calculations, they're prepared to lend me the SAME money as before the IR hike.

I must be missing something.

Just goes to show that "affordability" is a total sham.

Next mis-selling scandal here we come...

Last edited by meanmachine; 08-08-2006 at 6:12 PM.
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# 13
nelly
Old 08-08-2006, 6:12 PM
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Jesus christ half your wages for the next 25 years?

I rather develope a Crack habit, what sort of moron does that to themselves?
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# 14
AndrewSmith
Old 08-08-2006, 6:15 PM
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Quote:
Originally Posted by meanmachine
Sorry, I wasn't attacking you personally.

And I would have "thanked" you had you included the warning about repossession in your first post.

EDIT: By the way, interest rates have been updated on the A&L website and yet, bizarrely, based on their affordability calculations, they're prepared to lend me the SAME money as before the IR hike.

I must be missing something.

Just goes to show that "affordability" is a total sham.

Next mis-selling scandal here we come...

I though as much

You know my thoughts on over borrowing and the way I publicly slate the Northern Rock Muppet Mortgage 125%.

I agree that affordability and +100% borrowing is going to end up as the next big mis-sale venture. Best start training in law now to earn a killing from it.
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# 15
AndrewSmith
Old 08-08-2006, 6:17 PM
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Quote:
Originally Posted by nelly
Jesus christ half your wages for the next 25 years?

I rather develope a Crack habit, what sort of moron does that to themselves?

There are some who ask for it, trust me.

In Adviser mode I would tell the potential client to wait until they are in a position to afford it more easily.

The trouble with a forum such as this is that the why's and how's cannot be explained hence the fact I simply give the answers to questions posted.

Doesn't necessarily mean that I personally agree with the lending principle. Hence my signature.
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# 16
Debt_Free_Chick
Old 08-08-2006, 6:45 PM
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Quote:
Originally Posted by meanmachine
Sorry, I wasn't attacking you personally.

And I would have "thanked" you had you included the warning about repossession in your first post.
I, too, often struggle with "how" to respond to a question. Do I simply answer the question asked .... or do I add anything else.

It's a difficult balancing act. Sometimes if we add other comments that seem relevant, the thread goes off-topic and can develop into a bit of a rant No basic problem with a debate, but it can be difficult for others who simply want to find a simple answer to a straightforward question.

Andrew Smith gives very sound advice (in the helpful, generic sense of the word, not muddled by the statutory definition) and would not, IMHO, deliberately hide something relevant.

I'm sure you're not suggesting we should all mention the dangers of repossession in every post about a mortgage

Regards
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# 17
Milky_Mocha
Old 08-08-2006, 7:09 PM
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Lots of useful replies, thanks so much.

I didn't realise the rates on 5x salary mortgages are rubbish. I thought that so long as my credit rating is good the rate should be good.

Debt_free_chick: If you're not married and you want the property to be jointly owned or a tenants in common, you will almost certainly need a joint mortgage. If the property is to be registered in your name only, then only you need a mortgage.

Ownership & mortgages go pretty much hand-in-hand.


Sorry I didn't make it clear but we are married. We would want the property registered in my name only hence the need for 5x my salary.

Realwildone: It is utter madness to get 5x salary mortgage. The reason they give it to professionals like doctors is that they are unlikely to fall on hard times. If you fall on hard times with a 5x mortgage you really are in trouble.

If it was going to be me solely paying the mortgage then yes I think it would be a crazy idea but as it is would be both of us repaying there would not be as much of a 'struggle' if one of us was to fall on hard times.

mi-key: Also remember that if you and your OH are currently living together, then your credit rating will already be a joint one, so leaving him off wont make any difference.

We live together but none of our finances/ credit records are joint. I believe a new rule came into force about 10 months ago protecting ppl's credit rating from the adverse ratings of fellow housemates. Besides, his finances are recorded at our other house just to be doubly sure.

I don't know about whether the lender will view my affordability situation favourably. Would it be a good idea for me to tell them why I want the 5x salary? Should I post some figures so that you can give your opinions on how good my 'affordability' factor is?

I want to be as prepared as possible before making an apponitment with a (whole of market) broker.

Replies much appreciated.
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# 18
Arch-Angel
Old 08-08-2006, 7:31 PM
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Quote:
Originally Posted by Milky_Mocha

If it was going to be me solely paying the mortgage then yes I think it would be a crazy idea but as it is would be both of us repaying there would not be as much of a 'struggle' if one of us was to fall on hard times.
Can't say I know much about mortages - but if you're both going to be paying the mortgage, why are you not getting a joint mortgage? This would bring the income multiple down, creating (I assume) more options for mortgage products. You're going to ultimately borrow the same amount and you and OH are paying it - why worry about getting a single mortage with a high income multiple?
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# 19
Milky_Mocha
Old 08-08-2006, 7:51 PM
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Quote:
Originally Posted by Arch-Angel
Can't say I know much about mortages - but if you're both going to be paying the mortgage, why are you not getting a joint mortgage? This would bring the income multiple down, creating (I assume) more options for mortgage products. You're going to ultimately borrow the same amount and you and OH are paying it - why worry about getting a single mortage with a high income multiple?
I am worried that with my o/h's credit rating being so bad we might not be given a mortgage in joint names. (or the rate might be v. bad). Also, his rating would tarnish mine, which would bring an end to my 0% credit card offers etc.
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# 20
nelly
Old 08-08-2006, 8:12 PM
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Quote:
Originally Posted by Debt_Free_Chick
I, too, often struggle with "how" to respond to a question. Do I simply answer the question asked .... or do I add anything else.


Regards
I'd say answer the question,
then add
"but in my opinion"

then pass on your advice

I wasnt adviseing starting a crack habit, but its what I'd do
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