Tool for how much we can borrow

Crab

Hi

Hopefully just a quick one. I am trying to find an online tool/calculator that allows me to input my salary, my husband's salary and the value of (or equity in) our current home and then tell us what we would be allowed to borrow for when we move. Not that I necessarily want to be mortgaged to the hilt, but it would be good to know.
All online tools I've found ask me first how much I want to borrow - but I would like to know a rough idea of how much we currently COULD borrow.

Thanks

Leon_W

There is no such thing.

Every lender has different models so there isn't a definitive answer.

You'll have to trawl every lenders website to see if they have a calculator to start with and use them AS A GUIDE only.

regards

herbiesjp

Go on a 4 times income multiple as a rough rule of thumb.

Some will be more, and others less.

Don't forget to make deductions for any debts you may have.

Crab

Leon_W wrote: »

There is no such thing.

Every lender has different models so there isn't a definitive answer.

You'll have to trawl every lenders website to see if they have a calculator to start with and use them AS A GUIDE only.

regards

Ah. Thanks so much for saving my time - no wonder I couldn't find one! I only really wanted a rough guide so I can see what kind of property we could get when we move. Thanks anyway.

Crab

herbiesjp wrote: »

Go on a 4 times income multiple as a rough rule of thumb.

Some will be more, and others less.

Don't forget to make deductions for any debts you may have.

So four times my salary plus four times my husband's - I thought it was slightly less for a joint application than 4x?

Thanks for the reply.

Conrad

I think you could try Abbeys affordability calculator, but it only gives a rough and ready guide. Don't input non guaranteed elements such as overtime as guaranteed.

Crab

Conrad wrote: »

I think you could try Abbeys affordability calculator, but it only gives a rough and ready guide. Don't input non guaranteed elements such as overtime as guaranteed.

Thanks, that's great. I only need a rough and ready guide, so I know what vague pricerange to look at re next home.

Leon_W

It much easier to use herbies rule of thumb (it's pretty much how I assess ).

Take your joint salaries and multiply by 3 to say 5. (3 being conservative and pretty much any lender would do. 5 being a bit way out there but it could just be possible dependent on score and deposit etc)

Then deduct loans and credit cards.

£200 a month loan is £2400 annually so deduct the £2400 from your income at outset before applying income multiple. Loans due to complete within 12 mnths are usually ignored.

£2000 on a Credit Card would be treated as £2000 x 5% = £100 (£1200 annually) Deduct the £1200 from income before applying multiple.

regards

Crab

Leon_W wrote: »

It much easier to use herbies rule of thumb (it's pretty much how I assess ).

Take your joint salaries and multiply by 3 to say 5. (3 being conservative and pretty much any lender would do. 5 being a bit way out there but it could just be possible dependent on score and deposit etc)

Then deduct loans and credit cards.

£200 a month loan is £2400 annually so deduct the £2400 from your income at outset before applying income multiple. Loans due to complete within 12 mnths are usually ignored.

£2000 on a Credit Card would be treated as £2000 x 5% = £100 (£1200 annually) Deduct the £1200 from income before applying multiple.

regards

Thanks again, that was really helpful.
I am signing off now to do some sums. Don't want to stretch too far, but would be nice to know we could if we saw the house of our dreams.

Thanks again all for your help.