Income Ratios and mortgage lending

crocks · 29 June 2010 at 12:22PM

Hello

First time poster here ;-)

we are looking to move house and have some properties we are interested in, that are valued less than our current property.

our current mortgage offers the option of "transferring" or porting to another property, which we are keen on as we would not need to pay the early redemption fee's (as they could be claimed back)

we have just been given the bad news by our current mortgage lender that this would not be possible as our circumstances have changed (my wife no longer works), so therefore our income has dropped. The primary reason being our income is not enough for the amount we need.

my income is £37999 with occasional bonuses of £200 per yr.
We aim to sell our current property at £170k and buy at £150k according to the mortgage company we could only borrow £100k.

In my niave eyes, this is stupid, as we can perfectly afford the current monthly repayments on our current mortgage (which is for £125k btw) :mad:

I am not sure what our next step should be?? . Our credit history is fine..

My wife returning to work is not an option as she is recovering from depression, and it was hoped this move would really help her get better.

I guess i am asking should I go to a broker, is it worth it?? or should I give up now.. I guess we need a lender with a higher lending ratio than our current one, which I calculate at 2.5 times income..

Advise loved and strongly desired!!

JC

sharon1982 · 29 June 2010 at 12:46PM

The Halifax has one of the highest affordability multiples. For a good credit case, they lend up to 4 - 4.5, whereas building societies and other lenders tend to go for 3-3.8 x income. (That was what my IFA told me.)

Hope that helps!