Mortgage Multiples

ian21

Hello All,

I was wondering if someone could help me.

We are due to sell our house on the south coast (for £275k) and move to the NE where we have seen a house we like for (£240k).

Now, at the time we got our original mortgage (which is now on Halifax SVR) for the house on the south coast, we got approved for the loan amount as we were an existing customer with an excellent credit rating. The original mortgage loan amount was £260k and we have serviced this down to £246k.

I guess we'll have to go through the application process again (even though we'll opt to port our current mortgage if they will let us) and I was wondering whether you mortgage experts out there think this is do-able, multiple wise;

Purchase Price: £240k
Deposit: 10% - £24k
Remaining Mortgage Amount: £216k

I earn £50750 basic plus performance related bonus and my wife is self-employed (though not able to show 3 years worth of accounts as her business is relatively new).

Would my salary alone be sufficient to justify the mortgage amount?

If not, would any other lenders consider offering a mortgage based on the figures involved?

Thanks in advance.......................

happybroker

how much is the bonus and what figures can the wife show?
EDIT........do you have any other finance?

ian21

happybroker wrote: »

how much is the bonus and what figures can the wife show?
EDIT........do you have any other finance?

The bonus averages out at 12-15% each year but is not guaranteed.

My wife can show about £4750 per annum.

We do have other finance (currently £10k on a CC and a £9k car loan) but I will look to clear these before we buy the next house.

Be good to know what impact (presumably significant?) on the application if they weren't fully cleared though Happy.

Thanks for your help - appreciate it.

happybroker

it will be a little tight but I think it doable providing your score is high. Keeping the credit would have a pretty significant impact on this though.

some lenders will exclude your bonus and some allow half (the odd one all) and not all lenders expect your wife to be able to provide 3 years accounts either.

Best to sit down with an good whole of market broker, payslips, past p60's, accounts and your credit file to avoid wasting a lot of time.

I am assuming that your job moves with you of course and that your wife's business is transferable too.

Sounds exciting, welcome to the North!!

herbiesjp

Having dependents/children can affect your mortgage potential as well - do you have any.

Some lenders can go up to 5times income - but seeing as you want to keep your current deal, you'd better see what Halifax say first.

IF they say yes, then all well and good. Otherwise you'll need to shop around.

ian21

happybroker wrote: »

it will be a little tight but I think it doable providing your score is high. Keeping the credit would have a pretty significant impact on this though.

some lenders will exclude your bonus and some allow half (the odd one all) and not all lenders expect your wife to be able to provide 3 years accounts either.

Best to sit down with an good whole of market broker, payslips, past p60's, accounts and your credit file to avoid wasting a lot of time.

I am assuming that your job moves with you of course and that your wife's business is transferable too.

Sounds exciting, welcome to the North!!

Thanks mate - I'm actually moving home (family due to go to school etc) so pleased to be moving back.

Thanks alot for your help. Yes - the job is the same and my wifes business is fully transferable.

How much of the credit could be maintained do you think? Any rough idea?

Also, do you cover whole of market?

ian21

herbiesjp wrote: »

Having dependents/children can affect your mortgage potential as well - do you have any.

Some lenders can go up to 5times income - but seeing as you want to keep your current deal, you'd better see what Halifax say first.

IF they say yes, then all well and good. Otherwise you'll need to shop around.

Hi Herbie,

Thanks for your response. Yes - we have one child aged 3.

The current deal is Halifax SVR and is portable but, from our viewpoint, this is a long term move and a long term family home so if we had to take the hit of changing deals to get the funding then we would bite the bullet and take a slightly higher mortgage payment.

Clearly, we'd prefer not to have to do that though.

happybroker

I wouldn't of thought much of the credit could be kept to be fair especially, as herbiesjp mentions, kids have an effect. You would need to play around with the figures.

herbiesjp

If staying with Halifax is not a priority then you could have other options.

Don't forget to include any tax credits - to help offset deductions the lender will make on their multiples for having children.

Does your wife have any accounts at all?

ian21

happybroker wrote: »

I wouldn't of thought much of the credit could be kept to be fair especially, as herbiesjp mentions, kids have an effect. You would need to play around with the figures.

Thanks Happy - Thought as much.

Our preference is to get the NE house for less than the £240k quoted but it won't be by much so I thought I'd look to worst case.

When we progress further with our sale and make our minds up for sure on the NE property I will need a Broker, so if you could PM details I'd appreciate it.

Cheers

Ian

ian21

herbiesjp wrote: »

If staying with Halifax is not a priority then you could have other options.

Don't forget to include any tax credits - to help offset deductions the lender will make on their multiples for having children.

Does your wife have any accounts at all?

Herbie,

Thanks for your note. Yes she does but it's the age old challenge of keeping figures down for tax purposes Vs the need to justify income figures for borrowing so they aren't particularly big.