can we get the mortgage!

ShoC

Hi Everyone

First time posting here, Looking for a little help/Reassurance.

My fiance and myself are looking to purchase our first property valued at 150k, And have a 10% deposit.

I earny 14k myself and my better half earns 20k, We have done a rough check of what we can borrow and thats 135k which is exacty what we need.
but when we checked with HSBC we got told they can only lend us 118k what was a shame as they had the best rate from what we could see 6.79% on 2yr fixed

all other place want 7.09% on a five year fixed, And we dont really want to fix into such a high rate for 5yrs nor do we want to try multiple banks incase we ge rejected a few more times as I'm told it can cause damage to our credit report

so basically does anyone know of any realistic deals around which Myself and my fiance can get or are we chasing a lost cause.
My general understanding is we will get the ammount we need but at a ridiculous interest rate

Thanks for any help
Best Regards
Carl

koexelek

ShoC wrote: »

My general understanding is we will get the ammount we need but at a ridiculous interest rate

Nail on head, Carl.

At 90% loan to value, the lenders very much call the shots these days

herbiesjp

And there are not many lenders left who will offer you a 90% mortgage

SolicitorMidlands

My partner and I are looking too - we were advised by an independent advisor that there were banks willing to lend 90%. Is this not correct? Do you need 20% deposit?

ey_up

There are banks willing to lend 90% but only at high interest rates. The IFA that is associated with the accountancy practice I work for has suggested 20% but preferably 25%. Unfortunately it is not a first time buyer mortgage market but on the other hand it is a buyers housing market.

Robert_Sterling_3

ShoC wrote: »

My general understanding is we will get the amount we need but at a ridiculous interest rate
Carl

Delete ridiculous and substitute "appropriate" in the above sentence.

sundog

I thought back in the day a joint income of £34k would get you a mortgage of about £85k. What has happened to the world?

ShoC

I think the best move for us if we were to go ahead with a mortgage on this property would to try and tie into a short term fixed to get off, onto a variable which would be much lower! any agree?

herbiesjp

sundog wrote: »

I thought back in the day a joint income of £34k would get you a mortgage of about £85k. What has happened to the world?

The income is not the problem

The deposit is the problem

If a bank says they will offer you 4 times you income, you will still need to put the minimum deposit they require for their products, so if that is 15% then despite the fact you could borrow well over £85k based on your income multiples, if you do not have the 15% you are not going to get the mortgage from them.

herbiesjp

SolicitorMidlands wrote: »

My partner and I are looking too - we were advised by an independent advisor that there were banks willing to lend 90%. Is this not correct? Do you need 20% deposit?

I said

And there are not many lenders left who will offer you a 90% mortgage

So you will find a 90% deal, but not many lenders are doing this at present.

Also, as stated above, the rates offered for these deals are higher than those for mortgages where you can put a higher deposit

herbiesjp

ShoC wrote: »

I think the best move for us if we were to go ahead with a mortgage on this property would to try and tie into a short term fixed to get off, onto a variable which would be much lower! any agree?

I can't comment on yor particular situation, but you need to remember that you are putting down 10% in a housing market that is decreasing in value.

If you take say only a 2 year fixed rate, then you will come back for a re-mortgage deal when house prices will IMO still be lower, and also interest rates will be on the way up

A 5 year fix could protect you against those in some respect.

As if you try to re-mortgage in 2 years time and your LTV is then 95% you will have no choices at all to re-mortgage to (assuming same market conditions as today)