Advise for a simple situation!!

ladyadventure

Hello!!!

I have issue. Here are the basic facts:

I have £50,000 to put as a deposit on a home
I earn £35,000 p/a
I need to mortgage a property - Purchase price £220,000
I have two outstanding debts that total £575 pcm

I believe I am having issues with the amount I earn, I can find mortgage products offering 5x salary value. I need around 5.25x....

Anyone any advice?!?!!?!?

marc-h_2

I would think it is as much to do with your debt as it is your earnings. If I understand it correctly applications are based on affordability rather than a multiple of your salary. This means any debts come straight off the amount you can borrow, or the monthly repayment it will need anyway.

flammable999

marc-h wrote: »

I would think it is as much to do with your debt as it is your earnings. If I understand it correctly applications are based on affordability rather than a multiple of your salary. This means any debts come straight off the amount you can borrow, or the monthly repayment it will need anyway.

Thats true, although, I dont know her full bills breakdown and circumstances but a take home pay of roughly £2300 a month minus £600 debt repayment still leaves a cool £1700 which should in theory be more than enough to cover repayments which on a good fixed rate should be ok

VIGILANT22

ladyadventure wrote: »

Hello!!!

I have issue. Here are the basic facts:

I have £50,000 to put as a deposit on a home
I earn £35,000 p/a
I need to mortgage a property - Purchase price £220,000
I have two outstanding debts that total £575 pcm

I believe I am having issues with the amount I earn, I can find mortgage products offering 5x salary value. I need around 5.25x....

Anyone any advice?!?!!?!?

You won't be able to obtain those income multiples....altho income multiples are important so is affordability...and currently lenders become jittery when they see loans and CC's.....those amounts are deducted from the total lending

ladyadventure

MY POINT ENTIRELY!!!!!!!!!! This is my ONLY debts! I've never missed a payment in my life, my credit history is the squeakiest of squeaky clean! I've had a mortgage for the past 3 years, again never gone un paid or late. Nothing and yet, just that little bit extra I can't find, nor can I find any magic ideas to over come this issue!!!!!

The country's gone mad! We're paying for other peoples mistakes....ahhh, HELP!

ladyadventure

I know they are deducted but the mortgage I require is so close to what they consider acceptable.... and i've never had a credit card. My debt is only one car and one loan.

lush_walrus

Stupid question; but is there a reason why you dont clear your debt with your savings? It just sounds a little mad to think of £50,000 in savings, if you infact have x of debt to pay back over the next x years. Would paying them off not be an option, that if debt is the issue with regards to getting a mortgage may solve it.

I'm sure you have a reason why but thought it was worth an ask..

flammable999

lush_walrus wrote: »

Stupid question; but is there a reason why you dont clear your debt with your savings? It just sounds a little mad to think of £50,000 in savings, if you infact have x of debt to pay back over the next x years. Would paying them off not be an option, that if debt is the issue with regards to getting a mortgage may solve it.

I'm sure you have a reason why but thought it was worth an ask..

A good point but what if she then cuts into her savings, that would increase her LTV and that would make obtatining the required mortgage with that income even more impossible

Thrugelmir

flammable999 wrote: »

A good point but what if she then cuts into her savings, that would increase her LTV and that would make obtatining the required mortgage with that income even more impossible

There aren't many ways of saving that earn and beat the interest paid on debt.

Best to take a loan term view of clearing debt, then start saving or increasing equity in existing property.

Lenders will factor debt into affordability calculations. What matters is net wealth.

Thrugelmir

flammable999 wrote: »

Thats true, although, I dont know her full bills breakdown and circumstances but a take home pay of roughly £2300 a month minus £600 debt repayment still leaves a cool £1700 which should in theory be more than enough to cover repayments which on a good fixed rate should be ok

At 5% a £170k mortgage on a 25 year term is £993 per month.

Not so cool.......... as leaves £700pm.

Whats happens if interest rates have risen 2% when the fix ends?

flammable999

Thrugelmir wrote: »

At 5% a £170k mortgage on a 25 year term is £993 per month.

Not so cool.......... as leaves £700pm.

Whats happens if interest rates have risen 2% when the fix ends?

lol this is why I'm not a financial adviser but I like having a bash regardless