mortgage multiples - how much can we borrow?

Grimbal

Hubby & I are in the process of selling the current home (mine only) & buying together. My mum (who's somewhat pessimistic & Daily-Mail-esque in her outlook) is convinced that lenders are reticent to give mortgages these days. I just wanted to gauge opinion from everyone - are lenders easing off the reins a bit now or are they still a bit twitchy with their lending?

On a joint salary of around £60k, what would be a reasonable multiple for a mortgage that is likely to be accepted on an application do you think?

edit: forgot to mention that we'd be around a 30-40% LTV I'd imagine depending on mortgage amount
TIA

Liz
x

Henry_P_Chester

the LTV depends on the price your looking to buy at. Do you mean to say you will have around a 60% deposit? That's quite good so you sholdnt need to borrow anywhere near the maximum a lender will lend.

Lending is still very tight (as it should be) but by te sounds of it you won't have problem.

Grimbal

thanks - I was wondering if a 4x multiple was out of the question these days? Last time I needed to arrange a mortgage it was in the "3x single salary or 2.5x joint & nothing more" days. I'm just wondering if a 3-4x joint is out of the question? To be able to borrow 180k would mean a LTV of 36% if we bought in the range we're hoping for.

(We've got our eye on a place that would need a 4x multiple with a 48% LTV: 3x to buy and an extra bit for renovation)

Henry_P_Chester

Grimbal wrote: »

We've got our eye on a place that would need a 4x multiple with a 48% LTV

So to be clear you have about £240k deposit is that right? That's quite a bit So it will work in your favour it's only really the low LTVs that are hard to come by. but I don't know about 4x income. Is your credit rating good? Try the mortgage calculator here: http://www.nationwide.co.uk/mortgages/calculators/overview.htm

Grimbal

ooo-excellent linky - many thanks !

to answer deposit query, I have a £62k mortgage on a house that's on the market at £350k (obviously won't be the selling price though!!)

edit: my credit rating is good - always had well handled credit cards, car loans, no defaults on mortgage etc etc. Hubby had a bit of a rocky few years before me, but since he met me (4 years) has pulled his socks up substantially

Henry_P_Chester

Grimbal wrote: »

ooo-excellent linky - many thanks !

to answer deposit query, I have a £62k mortgage on a house that's on the market at £350k (obviously won't be the selling price though!!)

edit: my credit rating is good - always had well handled credit cards, car loans, no defaults on mortgage etc etc. Hubby had a bit of a rocky few years before me, but since he met me (4 years) has pulled his socks up substantially)

I can't see you having any problems. As I said it's mainly low LTV that are tough to get. Good luck.

Grimbal

thanks for the reassurrance. As I mentioned, my mum has a very tabloid outlook of her view of the country's financial state. She's been doing her best builders-sucking-air-through-teeth impression at every mention of us arranging a mortgage !

Thrugelmir

Borrow what you can comfortably afford allowing for saving into ISA's and pensions as well. Diversification is the key to successful investment. The future is uncertain at the moment and difficult times may lie ahead. A borrowing ratio of 3.0 to 3.5 times joint salary is historically considered sensible.

Grimbal

thanks Thrugelmir. Completely agree with what you said - I always make sure that my ISA allowance is used every year & I've started to introduce hubby to the concept of savings too ! I've had a pension from 3 months after I started working & OH has recenlty started contributing to his too. I think a 3.5x would be affordable now (& in the future should/when rates rise). This next move is the place we want to be in until retirement/downsizing/shuffling off mortal coil, so we want to make it the right one!

Trollfever

Grimbal wrote: »

thanks for the reassurrance. As I mentioned, my mum has a very tabloid outlook of her view of the country's financial state. She's been doing her best builders-sucking-air-through-teeth impression at every mention of us arranging a mortgage !

Don't let your mum know about this:


http://www.housepricecrash.co.uk/forum/index.php?showforum=22

Grimbal

yeeeeeeesss........