How much mortage?

linnyp

If somone had an income of £31K, about to sell a house for £130K with £40K equity in the house - what is the maximum mortgage they would be able to get? I can see 4 x income = £124K but would they be a good candidate for getting 4.5 x income given the amount of equity to put as deposit on another house?

AndrewSmith

Hi,

Depends on many other things such as status, credit history etc but, yes 4.5x income may be achievable with some lenders.

Andy

dander

I was told that the bigger the deposit (the lower the LTV) the more 'flexible' the lenders will be. It makes sense really - they have much more chance of getting all their money back in the event of a crash/reposession, so you are less of a risk to them.

However there are still lenders who are very strict about income multiples, so it makes sense to talk to a mortgage broker who knows the market well and can advise on applying to the right place. And, obviously, you've also got to be sure that you can afford the payments on the 4.5%!

Nenen

I'm quite new to this site and despite searching these threads for some idea of what would be considered a reasonable income multiple for mortgage I've yet to find the info I want!

I'd be really grateful if someone could tell me what a reasonable multiple of joint income of 60K would be for third time purchasers with around £70,000 equity.

We have some history of credit problems as 9 years ago we had to consult CAB who helped us contact all our lenders (except mortgage which we continued to pay), arrange lower pro rata repayments etc. for the 50K debt we managed to get ourselves into! We never defaulted or underpaid mortgage or essential services etc, the rearranged loans were all unsecured bank loans and credit cards and we had no county court judgements against us as all our lenders accepted our repayment schedules. Almost all of this money has now been repaid (HOORAY) and I was recently accepted for a Visa card (first time I have had one for 9 years and use it just for internet purchases and pay off in full each month). So I am hoping this means that our credit rating is repaired/repairing.
WE are really keen to move house to be nearer work and civilisation but it means moving to a much more expensive area. Having been though the awfulness of deep debt we don't want to overstretch ourselves too much and EVER go there again! So we certainly don't want to take up some of the silly offers of 6 times joint income I've read about on the net which we could never afford to repay! Also, we're in our late 40s so want to be able to pay off mortgage by retirement age of 65!
I've tried looking at some online calculators offered which show that at 5% interest we could comfortably manage the monthly repayments of around £1300 for a 180000 mortgage. Does anyone know if three times joint salary would be a 'reasonable' amount to borrow easily for people in our situation?