Income Multiples

NicolaD

Hi There,

I'm starting the process of remortgaging and potentially moving at the same time.

I don't want to put the flat on the market or look for a new property until I know what the figures are beforehand.

Currently I own (mortgaged) a freehold flat valued at £260k, so realistically would get £250k for it. The mortgage is £130, leaving a deposit of £120k.

My income is £36,306 per annum with a £1k guaranteed bonus.

Currently the flat is only in my name, but I am considering buying with my longterm partner. However, I am fairly certain his credit rating will not be good. Mine is 516 or something like that.

What is the maximum a lender would lend on me alone? If I do 'go it alone' will any of his income be taken into account (i.e. he currently pays half of the mortgage and bills) regardless of the fact he is not on the Deeds. Will any lender take this into account?

If he does have bad credit, does this mean no lender will touch him? If not, I need to find a lender who can stretch the pot!

Any ideas?
Thanks

Thrugelmir

I don't read much into credit scores as lenders have their own criteria. However 516 sounds low nevertheless.

Your partner is either part of the application process or not. So he'll need to go on if you want to use his income.

You may be better off trying to pay down your existing mortgage balance quicker, thereby lifting your equity. As your salary isn't going to get you a significantly larger mortgage.

herbiesjp

The maximum you could look at is 5 times income - but only with a good score with the chosen lender.

Rule of thumb would be more like 4 times income.

Don't forget that things like debts, children etc will impact on the maximum mortgage you could get based on your income.

To be sure of your partners credit history, and yours, you need to get up to date copies of your credit files.

Even if your partner does have adverse credit, if the LTV is low enough, there may still be options available to you on a joint mortgage basis.

You would be better off discussing your situation with a good whole of market adviser, and see what they suggest.