Is it back to the drawing board for us?

Plans_all_plans

Hi all

We are FTBs who have a 40k deposit. I am a stay at home mum (one dependent) and my fiance is working full time earning £15.5k before tax. We are also in receipt of Child Benefit, Working Tax Credit and Child Tax Credit. We have no debts at all and never have had any either.

We were hoping to borrow in the region of 50k, to enable us to buy a small house costing 90k overall.

I have just spoken to the Nationwide who have said that they are willing to offer us a maximum of £38,600. Obviously, this is short of what we would have liked by about 12k.

I would like to know if most banks/building societies will offer us very similar amounts? I have rung around and am waiting for calls back off various banks mortgage advisors, but in the meantime, I am concerned that we will have to rethink our plans.

Obviously we do not want to get into trouble by borrowing too much, but we were clearly quite far off the mark thinking our large deposit would help us!

Any advice much appreciated.

Thanks.

kittycatsam

My Fiance went to an independent mortgage advisor about 6 months ago and he was offered 5 times his salary at a good rate. This would have been based on selling our house and having about 95k to put down against a 215k house we'd seen. Probably about the same % proportions as your situation.

Plans_all_plans

Thanks kitty. I am concerned about the affordability of borrowing 5x his salary though. I always thought it should be not much more than 3x your salary? Is it not risky to borrow 5x times your salary? You can tell I am totally new to this, can't you?!

I am looking to get a part time job (have an interview coming up actually) so we might have a bit more money to play with in the future and obviously once our DD is at school, I will go full time. Maybe in the short term, given the above, finding someone willing to lend us more would not be so risky, as I plan to return to work fairly soon?

Chinkle

p-a-p - from what you have described sounds like you have come across a particularly cautious lender. Given your circumstances I think you should find the £50K you are looking for elsewhere.

Five plus times multiples were crazy in boom times and even more so now, remember we're at a time of historic lows in interest rates and repayments can only go up from here. 3-3.5 times salary is pretty typical (and in my view sensible) level of borrowing.

VIGILANT22

Quote: he was offered....
Being offered and actually obtaining is 2 seperate issues...barlays advertise 5 x salary but i have yet to meet someone who has qualified for this...

See a whole of market adviser as one mainstream lender would offer…. 100% of Child Benefit, Child Tax Credits, Family Tax Credits,

poppy_f1

on a salary of 15.5k RBS offered me 71k on a LTV of 50%

go and see a whole of market broker imo

VIGILANT22

when lenders work out affordability in the case of the OP with one salary, two adults and one dependant....the amount offered would be different to that of a single person for obvious reasons............

Conrad

Also affordability multiples are higher for higher earners as they are deemed to be less risky and more likely to have surplus