Will any lenders lend us what we can AFFORD? 28 January 2005 at 2:56PM in Mortgages & endowments 6 replies 1.6K views

tcall

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?

herbiesjp

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.

tcall

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.

Oracus

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`

loobs40

Wouldn't a self certification mortgage fit the bill then ? In theory you don't have to declare your earnings

payless

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) -

Twmble

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