100% Mortgage vs 95% Mortgage+Loan advice

Ben_Baileys

My situation has a certain similarity to yours Gopes.

I'm looking to buy with my partner. We're a gay couple though so if the reason for knocking down the mortgage amount for a couple is because of future child-rearing considerations then that's not a relevant consideration to us!

We have a joint income of £60,000. Unfortunately, unlike you Gopes, we're not looking at a major pay hike at any time soon.

What kind of amount do people think we might be offered? Are we likely to be offered a higher mortgage than a heterosexual couple who, judging from online calculators are likely to be offered £150,000 - £170,000? We'd like to borrow £200,000 ideally. Is that just fantasy?

HelpWhereIcan

Ben_Baileys wrote:

My situation has a certain similarity to yours Gopes.

I'm looking to buy with my partner. We're a gay couple though so if the reason for knocking down the mortgage amount for a couple is because of future child-rearing considerations then that's not a relevant consideration to us!

We have a joint income of £60,000. Unfortunately, unlike you Gopes, we're not looking at a major pay hike at any time soon.

What kind of amount do people think we might be offered? Are we likely to be offered a higher mortgage than a heterosexual couple who, judging from online calculators are likely to be offered £150,000 - £170,000? We'd like to borrow £200,000 ideally. Is that just fantasy?

Not a fantasy, there are quite a few lenders that may well do the amount you need. The number will reduce dramatically if you need to borrow more than 95%, but it should still be possible at 97% or 100%.

Unfortunately, I am not aware of a lender who will do more for you because you are a gay couple. However you will (in theory) do better on some lenders' affordability calculators than a straight couple with kids on the same income as some lenders make a deduction to allow for the additional expense of the little bundles of joy. Therefore, it may be that because you are childless you will get more than some straight couples.

The main reason for knocking down the amount borrowed/owed at any one time is to save fees & interest and have the mortgage cost less overall/monthly, so I would argue that it applies pretty much equally, gay or straight.

I would have a word with a whole of market broker who can assess your situation and reccommend accordingly.

Hope this helps

Gopes

I would suggest that on the basis that you have a joint income of £60k (significantly higher) than my flatmate and my joint income of £52k (which is assuming our respective payrises - current joint income is about £47k).
I would suggest that you might not want to 'disclose' to the lender that you are a couple - certainly, it would appear that they will lend more to two friends sharing than a couple (although not sure how they would differentiate between) gay and heterossexual couples.

Certainly, all the advice offered on here - including the excellent calculations by HelpwhereIcan, seem to indicate that a 95% mortgage will represent a significant saving over a 100% mortgage, so my flatmate and I, having made sure we can afford the repayments with a healthy safety margin - even on current salaries, are looking at ways we can 'conceal' or lack of savings - i.e. if I get my sister to open a 0% Balance Transfer Credit Card, and essentially borrow a chunk of money for a very short period - e.g. if I stop paying off my Credit Card for the next 3-4 months, and my flatmate does the same, we would rapidly owe say £5k in say 4 months - now if we just saved that money, and just before applying for a mortgage did a balance transfer onto sisters card for that short period - it makes our situation look a bit better. As soon as we have the mortgage, we can just reverse the process - e.g. open a 0% Balance Transfer and transfer the debt back into our name.

OK, we are dodging round the 'non-disclosure' issue, and so will have to think carefully, but I would expect that as long as going forward we don't get into any difficulties meeting the mortgage payments, then the lender is not going to have any reason to worry. If they somehow managed to figure it out whilst we were applying (not sure how they would do this anyway), then the worst that would happen is that they would refuse us a mortgage.

Of course, if something went wrong, then there would be problems, but I hope that I am mature enough to weigh up the risks and have decided that we can easily afford mortgage payments for a £200k 95% morgage, fixed at say 4.74% (nationwide) or 2 years, even without our expected payrises. Hence, any payrise is only going to give a bigger safety margin (and/allow some overpayments to pay off the equity quicker).

Hope that all made sense.
Gopes

HelpWhereIcan

Gopes wrote:

I would suggest that you might not want to 'disclose' to the lender that you are a couple - certainly, it would appear that they will lend more to two friends sharing than a couple (although not sure how they would differentiate between) gay and heterossexual couples.

There is no reason why a lender will lend more to friends than they would a couple. The issue (for those lenders where it counts) is more about whether there are finanially dependent children or not; hence my reference in my last post to a childless 'pair' (in a relationship or not) potentially being able to borrow more than a couple (including same sex couples) with children.

It is actually academic as most lenders do not ask if you are a couple. Some give the option of putting 'living together as partners' as a response to marital status, but this does not have a direct effect on the amount you can borrow.

There could be an arguement about the effect that marital status can have on a credit score - but more often than not, this is a small part of the overall score and would not have a significant effect on the total loan available.

3Catsmad

Hi,

Just a query relating to your figures. Unfortunately I am not in the same position as those mentioned above and have only been excepted for a 95% mortgage thus meaning that I need to find the extra 5%.

From what you are saying (excuse the blonde moment!) does this mean that I am better off doing things this way rather than pushing for a 100% mortgage anyway?

I'm very new to all this and would appreciate any information that you can provide. Also new to this site so if you would require any additional information then please contact me.

Thanks in advance,

Julie

k1mmie

Hi, Sorry if this is the wrong thread, but can anyone tell mewhere wo get advice on 90/95% mortgage if you have had credit problemsin the past.

So far I have been told it looks like 85% may be the highest. Trouble is we dont have a lot of equity in our current home and therefore we could not do this figure.

Thanks.

herbiesjp

k1mmie wrote: »

Hi, Sorry if this is the wrong thread, but can anyone tell mewhere wo get advice on 90/95% mortgage if you have had credit problemsin the past.

So far I have been told it looks like 85% may be the highest. Trouble is we dont have a lot of equity in our current home and therefore we could not do this figure.

Thanks.

Hi K1mmie

Your best bet is to firstly get a copy of your credit files from Equifax or Experian

Armed with that go to a fee free whole of market adviser - please avoid all these "specialist" companies that advertise all over the place, as they offer nothing different to what a good adviser can get for you, and also without paying their hefty fees

What kind of bad credit history do you have? How long ago was it first registered?

What the bad credit history was, will dictate what kind of mortgage amounts you can look at as well as what rates will be available.

The problem with adverse deals is that there is no set standard to define, light adverse, nr prime, medium, ultra light, heavy etc etc. So it can all get very confusing if trying to go it alone, as all lenders use thier own defintions and criteria

I would suggest using the services of a professional.

HTH