Mortgage - 4 x salary

thirdparty

I'm looking for a mortgage provider willing to lend 4 x joint salary.
We've just seen a property we like more than the original property we were going to buy but the price is much higher.
We are now looking to borrow around £210K plus put a deposit of £110K once our property is sold. We have two buyers and it's first to arrange a surveyor and place a deposit. Both are buy to let.
Our joint income is around £53K and we can comfortably afford around £1200 to £1400 per month.
Hoping to complete in 6 weeks.
Would like some ideas to how easy or difficult it is to obtain the mortgage. Any ideas and tips before we speak to an advisor. thanks

Woby_Tide

Nationwide and Halifax are a couple of the banks who lend based on affordability rather than income multiples so they may be worth a try

completing in 6 weeks is pushing it a bit if you haven't a mortgage in principle even yet

lisyloo

I would advise you to think very seriously about buying a house and streching yourself.

Reports are now coming out that house prices are starting fall

http://www.timesonline.co.uk/article/0,,2-1191515,00.html

You are buying at exactly the wrong time.
Right at the peak of the market and your house price may well drop.

You could be much better off waiting a few years and getting much better value.

I suggest you think about it very hard, as this decision could affect your lifetime wealth in a big way.

da644

Hi

Lisyloo advice is good if you are buying as an investment which you are looking for a quick return on and then moving on. If you are looking for buy a 'home' and will be staying there 10 - 15 years, then I don't really think it matters when you buy or if you do stretch yourself a little. 4x income is not that much more than most bank offer anything (I know silly people with 7, 8, 9 or even 10x income on self-cert) but 4x is ok, and over a good time frame (10 - 15 years) the likelyhood that the house will be worth then than now is almost zero, but you never know!!!

So, if it is a home you are ok, if it an investment I would think again. BUY ONLY FOR THE RIGHT REASON.

Best Regards

Andrew.

lisyloo

Lets be clear that this is 4 X joint salary, which I think lenders regard as worse than 4 X single salary.

If you are looking for buy a 'home' and will be staying there 10 - 15 years

The problem is that sometimes things don't work out a people plan. The possible "spanners" in the works are
death, divorce, sickness, redundancy, accident etc.

Some of these you can cater for e.g. buying life insurance, but others are harder e.g. I don't think you can get insurance for divorce.

Becoming a forced seller when prices are falling is bad, because you can find yourself in negative equity.

It's just a warning to think about it carefully.

lisyloo

Bear in mind also that interest rates are still rising, so if strecthing then cconsider a fix.
Certainly consdier the effect of rising rates if you take a variable rate.

Rates are expected to peak at something ike 5.25% so e have about 3 more rate rises to go.

thirdparty

Thanks for all your comments.

I have made enquiries and am waiting for the application form from Nationwide. They have offered to lend just about the amount we require. We also got an offer from IF but over a 30 year period.

We really like the property, it's a new property and good value for the money considering all the other properties we have looked at. It's very hard to find a nice property in a nice location at a reasonable price.

The headline in todays evening standard was 'Shock rise in property prices'. Personally I believe that prices will either remain stable or rise slowly even with rising interest rates for a few years to come. There is acute shortage of property with a growing population. The majority of people prefer to own their own homes rather then renting, I guess we are a nation of home owners. We are even affecting the prices homes abroad as many of us are buying a second property abroad.

Quick query - what are the advantages of going with a mortgage broker rather then doing it yourself especially when the majority of mortgage providers will not lend 4x salary.

DiggingOut

Quick query - what are the advantages of going with a mortgage broker rather then doing it yourself especially when the majority of mortgage providers will not lend 4x salary.

If you use a fees-free broker, it costs you nothing, and they may find a good deal that you don't know about, or may have exclusives with some lenders that you couldn't get anywhere else. Doesn't hurt to contact a fees-free broker and find out if they can beat what you are currently considering.

yonk

I have always sorted my own mortgage but things have got complicated and I resorted to going to a fixed fee (payable by the lender) broker.

He went through loads of different products with us comparing the true cost of each and then sorted the new mortgage out in 6 weeks. We got a big chunk of cashback and ended up with a tracker on the same rate as the original mtg but a much lower cost over the two years of the deal. It was broker exclusive deal and well worth changing, particularly as the lender paid the remtg fees.

So, resistant as I was, I would now go back whenever I need to look at my mortgages. And have done, only to be told to stay where I am for one mtg as it's the cheapest option. Happy customer!

kingkano

Quite funny to read this blast from the past. Dont buy because the HPC is coming (almost 3 yrs later and its still not here lol). 4x salary being a stretch, and even INT rates peaking at 5.25% all make me laugh a little

regularsaver1

and 2004? grrrrrrrrrr