Will any lenders lend us what we can AFFORD?

My partner and I are self employed. Our combined annual income is around £30,000. We currently have a business loan which is being repaid at £1200 per month. We are paying residential rent of £550 pcm.
In a few months time the business loan will be paid off and we would comfortably be able to afford £1500 per month in mortgage repayments.
We would like to get a mortgage of around £120,000, however are there any lenders who will lend us this, despite the fact we could afford to repay a mortgage twice as large?

Replies

  • herbiesjpherbiesjp Forumite
    8.5K Posts
    You can get very close to that figure with a lender that uses affordability as a means of agreeing mortgages as opposed to income multiples. The other important factor would be what is the loan to value - so what is the purchase price and what is the deposit being put down.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • tcalltcall Forumite
    222 Posts
    I was hoping to pay 5% initially, as the rest of our cash in going into paying off the business loan asap, meaning there is minimal savings to work with.
  • OracusOracus Forumite
    34 Posts
    Part of the Furniture Combo Breaker
    Forumite
    I work for a high street bank, in a commercial banking role. AFAIK most highstreet banks now use affordability and LoanToValuation (LTV) to asses mortgage acceptance rather than salary multiples.

    I would approach the bank you both hold business accounts and the current business loan with, as they know full well you can afford the repayments, and would probably be more than willing to lend you the money - as we all have targets to exceed you know!

    Os` ;)
  • loobs40loobs40 Forumite
    1.2K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    Forumite
    Wouldn't a self certification mortgage fit the bill then ? In theory you don't have to declare your earnings
  • paylesspayless Forumite
    7K Posts
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Forumite
    loobs40 wrote:
    Wouldn't a self certification mortgage fit the bill then ? In theory you don't have to declare your earnings

    unfortunately no as

    1. need a bigger deposit for self cert

    2. Most self certs still need you to declare your income -just no proof required ( ie self certify your income) -
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • My partner and I have a combined salary of £35,000 and rent of 500pcm. Both have interest free overdraft of 1500, but apart from that no debt.

    Is it reasonable (possible? foolish?) to attempt to get a mortgage for a £200,000 house with a £35,000 downpayment?

    First post, so be gentle!

    T

    :confused:
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