Earnings multiples

CLS26

Hi all,

Apologies if a similar thread has been posted before (I had a look on the search engine but couldn't see anything).

I was wondering what people's thoughts were on future trends in earnings multiples? I saw on one thread that the current trend is 3.5x income (I couldn't see what the trend would be for a joint application).

CLS

_Andy_

It varies lender to lender, max 5x.
What is your own situation?

CLS26

Hiya thanks for your reply Andy.

We're looking at small houses that are currently on the market at anywhere between £140,000 - £170,000.

Our max purchase price (from a month-to-month affordability point of view) is £150,000. We are aiming for £20,000 deposit, so the loan would be £130,000.

I earn 65k gross, partner is on 25k gross, and I was wondernig whether multiples would go lower than 2x, as we already have the low deposit and my partner's lack of credit rating to contend with.

CLS

unite79

in a nutshell -No they wont go lower than 2x - and before anyone says i cant see the future, I think I can see far enough!

herbiesjp

Sorry - do you mean if multiples are lower, you could get a better deal?

If so, that is not the case.

What would improve rates is an increased deposit - if you can try and bring your depoit to 15% based on the £150k purchase price it may improve rates slightly for you with some lenders.

Most lenders will offer 3 times income

CLS26

sorry jp my post was not clear. I was worried that multiples would drop below 2x, because I couldn't match that. I have no expectations about being able to get a "good" deal from any mortgage lender - I'm just hoping they'll let us have any loan at all!

Thanks again for your replies,
CLS

herbiesjp

Based on your income I cant see why you would nt be able to get a mortgage.

Looks straightforward - you simply need to find the best one for your circumstances.

Although at over 85% the choices will be limited.

Are you going via a whole of market broker, as they may be able to explain the scenario more clearly to you in terms of multiples etc, and the whole buying process

CLS26

We're definitely using a broker!!!!!!!

We've asked around my partner's office for recommendations in the local area. Not surprisingly, we've had mixed reports, but I found the advice on what to expect from MSE.com to be very helpful!

CLS

m1ntie

CLS26 wrote: »

Hiya thanks for your reply Andy.

I earn 65k gross, partner is on 25k gross, and I was wondernig whether multiples would go lower than 2x, as we already have the low deposit and my partner's lack of credit rating to contend with.

CLS

You have an excellent joint income - £7.5K per month gross, but a relatively small deposit. Why dont you make a conserted effort to save hard for a few months, and increase your deposit to over 25%. This will open up many more options and more advantagous rates.

herbiesjp

CLS26 wrote: »

We're definitely using a broker!!!!!!!

We've asked around my partner's office for recommendations in the local area. Not surprisingly, we've had mixed reports, but I found the advice on what to expect from MSE.com to be very helpful!

CLS

Depending on your circumstances you may be happier dealing with someone over the telephone/email then.

Someone who although might not be sat in front of you will take the time to go through the relevant processes in order to come back to you with good advice based on your circumstances

Just a thought