Who gives a 5 times salary mortgage?

missk_ensington

I knew there was a good reason why my broker pushed a self-cert on me, he obviously didn't want the comeback on him when my salary had some VAT put onto it! Oh well, guess thats why its fondly named 'lie to buy'.

Still don't blame people, where I live its most factory work earning £10,000 a year. Even with 2 people working full time they're never gonna get a house they start at £90,000 and thats for something tiny on a main road!

You have to speculate to accumulate, or alternatively, be honest and wave all the successful people who weren't so honest drive past in their Porches!

AndrewSmith

Tassotti wrote:

That's where I thought you were heading. Aren't there strict guidelines about offering advice about this on forums?

There are indeed which is why my signature clearly states that I am not offering advice.

Anyway, anyone wanting realistic borrowing, pm the above or me for a decent broker (not saying Andrew's not a decent broker) if you wan't to get on the ladder .

Realistic being? Do you mean overstretching? Very wise words in an enviroment of increasing interest rates I have to say.

If you dont fit the criteria for the amount of borrowing then simply borrow less.

missk_ensington

Tasotti- Irony was never your strong point at school? Find it quite amusing that you questioned AndrewSmith's ethical practice in drumming up work, then in the next sentence you do exactly the same thing!! How do we know you aren't worker as a broker for a broker! lol

Arch-Angel

missk_ensington wrote:

Tasotti- Irony was never your strong point at school? Find it quite amusing that you questioned AndrewSmith's ethical practice in drumming up work, then in the next sentence you do exactly the same thing!! How do we know you aren't worker as a broker for a broker! lol

He's not

He is, however (unless I'm misreading other posts that he's made) a BTL LL with a handful of properties on the go. I'd suspect that his motives for 100 year mortages and 10x multiples are to help ensure that the market keeps rising...

Personally speaking I think that the posts from Andrew and MortgageMamma - to name but two - are always worth reading and add significant value to these forums. My opinion - but one that I think is shared by the majority on here.

maryjane01

I think in some situations a 5 times mortgage would be ok. Mostly in cases where people are young and they have good future prospects. If you know that your salary is going to increase because you are a professional just starting your career, as a proprtional payment of your income the repayments are only going to decrease as your income increases. Property prices predictions are speculative, but one major factor is supply and demand. I think in London demand is high so I feel secure that property prices will not have a dramatic fall, perhaps a small correction at some point, but more than likely they will continue to steadily rise at a slower pace than it has done in the past. That is my opinion. If an average starter house or flat in London is £250,000 (I just made that up, not based on any actual figures), a 5% annual rise is £12,500. In other parts of the country 5% may not be such a large amount if a 1st time buyer is looking at a £100,000 house 5% is only £105,000. If somebody wants to own their own home it makes sense to me to get on the market sooner rather than later, even if in the short term (2-3 years) you do have to make sacrifices by not going out so much etc. If somebody does borrow 5X they should be properly informed of the risks and understand them. I also think in instances where prople are high earners it is ok to pay 50% of your income to a mortgage. If you work in finance in London and earn £100,000 a year, even after mortgage payments then tax you can still have plenty enough to live on. Many people don't fit these scenario's I have described, but young people with good prospects should not be put off high borrowing. (I mean debt such as mortgage, not bad debt such as credit cards).

meanmachine_2

IRs predicted to be 5% by the end of the year. That's another 3K LESS that the lenders should be offering me.

We'll see if it ever happens. Or whether A&L and the rest simply fiddle their affordability criteria again.

But borrowing to the max when we *look* like we're heading into an inflationary period (that's rising goods and services NOT wages) is a little unwise, I'd suggest.

AndrewSmith

meanmachine wrote:

IRs predicted to be 5% by the end of the year. That's another 3K LESS that the lenders should be offering me.

We'll see if it ever happens. Or whether A&L and the rest simply fiddle their affordability criteria again.

But borrowing to the max when we *look* like we're heading into an inflationary period (that's rising goods and services NOT wages) is a little unwise, I'd suggest.

My point exactly, thanks MM

:beer:

Tassotti

missk_ensington wrote:

Tasotti- Irony was never your strong point at school? Find it quite amusing that you questioned AndrewSmith's ethical practice in drumming up work, then in the next sentence you do exactly the same thing!! How do we know you aren't worker as a broker for a broker! lol

Yeah, but I am not a broker!! Difference is I can recommend someone to get you the loan you need (at a reduced price) and Andrew can get the same deal but cannot advertise it.

I am a poor landlord

Careful_girl

A personal illustration of some issues mentioned. I have always put every penny I earn into property. It is my choice. I have always borrowed as much as possible to get the best property I could afford. I don't spend my money on much else. I enjoy my four walls and I have bought and sold as I have improved my properties and as my circumstances have changed. I am fortunate to have a salary which increases a little every year. I have a good credit rating. So far it has been a good investment.
Unfortunately my husband has been out of work now for 11 months. There is no way for us to afford our home. We have had to sell and downsize. It has cost thousands. However I took the risk on with open eyes. I have enjoyed my time in my lovely house. I do not regret borrowing so highly.
I do worry about the future of interest rates and property prices and I would never encourage others to borrow what they can't afford. However I rarely hear how others gain pleasure from living in a property. I would rather stay at home than spend my money going somewhere else. It may cost me a high percentage of my salary but my other costs are low.
Each to their own.
CG.

nelly_2

Careful_girl wrote:

I enjoy my four walls

CG.

I should have married you!

I'm a plasterer and can show as many enjoyable walls as you want