Question about income multiples

milliebear00001

Hi there

I want to take out a mortgage in the next year or so on just my salary (my OH is disabled and receives various benefits so our income is actually a bit higher than my salary which is £22000pa).

My question is, which banks/building societies are lending the highest multiples at the moment? Obviously, a £22000 salary isn't going to achieve a huge mortgage if I can ony get a three times income multiple, but I have a deposit of £20000 (possibly more) and would like to borrow around £110000. Is this possible with any lender in the current market?

Thanks.

kaych

our bank basically gave us a number that was 3.5x of our joint income (that was the maximum they could lend us) and our LTV was 70%.

i think it may be quite difficult these days to get a mortgage 5x your salary.

VIGILANT22

Are you applying for a mortgage in your name only as you think your OH's income won't be considered?....If so, some lenders will consider DLA etc, the % considered varys from lender to lender....Best to see a whole of market adviser ....

milliebear00001

VIGILANT22 wrote: »

Are you applying for a mortgage in your name only as you think your OH's income won't be considered?....If so, some lenders will consider DLA etc, the % considered varys from lender to lender....Best to see a whole of market adviser ....

Really? - yes, I had assumed OH's enefits would be disregarded for mortgage purposes. I spoke to a whole of market broker last year about whether my husband's DLA and Incap could be included as 'income' and he said it was very unlikely - esp. Incap which makes up the majority of his income. He seemed to think the only benefits that would be considered would be a 'whole of life' award, which my OH doesn't have. Since then though, I have seen various mortgage 'calculators' that ask you to state other income such as 'tax credits' and 'child benefit'. Why do they do this if they don't take those forms of income into account?

VIGILANT22

Some lenders treat benefits paid because of a disability in the same way as earned income, provided that the applicant/s can show a letter of entitlement or other suitable evidence to confirm the amount being paid. Lenders are likely to exclude a benefit if the applicant has been told that its payment will cease on a stated date in the near future….and cautious where payment of a benefit is subject to regular review, but if satisfied that withdrawal of the benefit is unlikely, they may treat it the same way as earned income . Some lenders will only accept a % of benefits ie Disability Living Allowance 50%...............Maybe worthwhile having the conversation again with a whole of market adviser………..

herbiesjp

Different lenders act in different ways.

Other things that will affect the multiples offered/affordability calculator - deposit/LTV, credit history, other debts, children etc... so don't forget to take these into account as well if applicable.

milliebear00001

Thanks everyone - very helpful. Sounds like I need a good broker. My local area doesn't bring anything much up when I search online - any idea where I can go to find one who is whole of market and free?

Also, the other broker I spoke to, recommended I talk to my own bank as they would be my best option for higher multiples. Is that likely to be true?

herbiesjp

milliebear00001 wrote: »

Also, the other broker I spoke to, recommended I talk to my own bank as they would be my best option for higher multiples. Is that likely to be true?

Not necessarily - it all depends on their lending criteria.

kevin.rd

does your income effect your interest rate as well?

kevin.rd

or your LTV?

herbiesjp

The LTV affects your interest rate.