YBS or Notts BS 3yr fixed rate deal?

livalicious

Hi there,

We had an offer accepted on a property for £217000, we putting down a £37 000 deposit and I would just like some advice on which of the following two deals to apply for:

Nottingham BS

3year Fixed @ 5.29%
Reverting to SVR of 6.14%
Monthly repayments £1080
Fees about £1200

Yorkshire BS

3year Fixed @ 5.39%
Reverting to SVR of 4.99%
Monthly repayments £1092
Fees about £1052

Both are over 25 years. Our joint income is £21500 (me) and partner £11000 basic + £19000 regular bonuses/ overtime/ allowances.

At the moment that YBS seems better because of the SVR, however Ive already spoken to Nottingham and discussed my partners wage breakdown. He gets paid a basic + work bonuses and other allowances that are guaranteed, though they may differ by a few pounds week to week.

Notts said they would take all of his salary into account, but I dont know if YBS would only take part of his bonuses as part of their lending multiple. I will be ringing them in my lunch break, but being the impatient soul I am, I thought Id ask your opinions on here first.

Also i dont have much of a credit history, had a credit card once about 6 years ago and used it once, thats about it. But we both on the electoral roll and we checked our credit reports and everything was in order.

Anyone have experience with either of these banks, any advice please? I just want to make sure I apply for a mortgage we more likely to get then be turned down. I have spoken to a broker before but i found these deals on comparison sites and they are better than the ones he proposed.

JonnyBravo

livalicious wrote: »

Notts said they would take all of his salary into account, but I dont know if YBS would only take part of his bonuses as part of their lending multiple. I will be ringing them in my lunch break, but being the impatient soul I am, I thought Id ask your opinions on here first.

Based on guess work you're going to need all the salary you can find to borrow £180k on the figures you've provided. Even with his bonus will you get £180k off either of them? It'll be "close" IMO.
Do they publish maximum multiples they will lend? Have you spoken to anyone at a branch etc?

livalicious

Nottingham BS told me they could lend us up to £202 000 based on our joint income. I tried to find lending multiples on YBS' website and on google, but it doesnt say anything about it ( i might have missed it somehow). But it did say that they base their lending criteria on affordability rather than multiples.

Ive entered our incomes (his basic and bonuses) using their borrowing calculation thingy, and it said we could lend up to £191 411. Before that I entered out outgoings as well (about £200 each) and this reduced what we could borrow to about £134 758!!! I assumed by outgoings the meant bills, mobiles, etc. But when i clicked the little help button next to outgoings, it was actually any loans, credit card payment and child care, of which we have none.

Im gonna ring YBS later in my lunch break.

livalicious

Just to add, it looks like we wont be able to get a mortgage with YBS after all. Had a chat with one of their advisers, and I explained about how my partners wage is broken down. He basically earns roughly £30 000pa, but his payslips breaks his weekly wage down as basic pay + allowances, etc, which are basically guaranteed. This is how his pay has been calculated since he started and he has always had these allowances every week.

However YBS said they would only take half his allowances/bonuses into consideration, which means that they could only lend us up to £176 000, just £4000 under what we need. Harrumph

somethingcorporate

That's a big old mortgage on such salaries, you may find going gets a little tough. My wife and I have an identical sized mortgage and twice the income and still feel it's a massive chunk of our income (hence we are doing everything we can to pay it down).

livalicious

i know its quite a big mortgage, and this being our first time its very scary :eek: But house prices down where we are (SE London) are still quite high compared to most other places. And weve tried to wait it out for the last 3 years, to save more of a deposit. Ive done spreadsheets over and over to make sure we can afford this. Our take home pay is £3400, so our mortgage repayment is about 30% of that.

The reason why we know we will be able to afford that is he has been saving a £1000 per month for the last few years, the monthly repayment will be £1080. He also pays £300 towards rent, and the rest on his outgoings and to use on whatever he wants to spend it on, we go out every other weekend. Not big spenders but we dont scrimp either. Ive worked out our utilities + plus insurances would be £300 or so, which is what i spend on rent now, and I also manage to put away about £400 - £500 a month in savings. We dont have huge outgoings, no kids, and no outstanding debt either. We also will be putting at least 3 monthly repayments worth of savings in the bank.

So on this basis, we we wont be going on holidays for awhile but at least we can manage. We will be trying to overpay/save as well, by cutting back on all the takeaways, cinema trips.

U making me really worry now by saying u earn twice as much and still feel the crunch!

somethingcorporate

Well it does sound like you're in complete control and have a good grasp of what's going on - which is certainly more than what we did when we bought our first place. It was only the MFW section on here that made me understand quite how expensive mortgages are.

You've obviously done very well to save so much and it sounds like you've got your head screwed on so I doubt you have much to worry about.

It's great you're talking / thinking about overpaying before you've even got your first mortgage - that's a fabulous start (:T). If you have little choice over house prices then you are where you are and just make hay whilst the sun is shining and overpay all you can!

Edit: One more point to add... if you don't see your life changing much in the next few years consider fixing for longer (5 years) - this gives you much more certainty over your mortgage costs, especially when there is talk that rates will be much higher in a few years time.

dimbo61

You are only 4K short on the YBS deal and you say you have 3 months worth of savings in the bank ?
I would as "somethingcorporate " has mentioned look into a 5 year deal and consider an offset mortgage.
I have been with YBS for last 5 years and happy with there service

livalicious

We really would have preferred having a 5 year rather than a 3 year fixed, but of course the rates are a bit higher. We could still afford the repayments on the higher interest rate, but this being our first plunge into home ownership we a bit worried about unforeseens costs, and also wanting to have the spare cash to do up our place nicely.

So we opted for the lower rate, its about £60 difference per month to the best 5 year deal I could find. But we will be or hoping to make overpayments of at least £100 per month. So we will be overpaying as though we on that higher rate, but at least we would have that option to use the money on something else if needed. So in that way at least after the 3 years we would have reduced our mortgage a little bit more by the time we have to possibly remortgage again.

Weve sent the applications forms now to Notts BS after much uhmming and arhhing, Im one of those obsessive people who will search till the very last minute to get a better deal. Im hoping this will have been the right decision for us. Even this morning we were discussing whether we doing the right thing buying now.... Its the curse of being a first time buyer, without someone there to hold you hand, you constantly questioning urself and everything. Thats why this forum is a godsend

Catanddogs

It sounds like your plans have been well thought through keep us updated.

livalicious

Thanks Catanddogs, we will do, judging by your sig you've managed to bring your mortgage down by quite a bit in two years, well done you! I hope we will be in a position to do the same!