6X Joint salary mortgage AIP - is this normal?!

Daniel_B

Hi peeps,
we've just received an AIP from a lender through an excellent broker, we were 'only' after about 3.6 times our salary, but they have come back to to say they are willing to lend 6X our combined salaries!

Needless to say we will not be going this far, but it strikes me that a LOT of people would happily borrow whatever the lenders are willing to offer.

Is 6X joint salaries REALLY the norm these days?

I was proper shocked :eek:

Dan

HelpWhereIcan

No no no - would love to know who they used. I have one or two clients who would love 6x joint.

What kind of incomes & deposit do you have?

Most common joint multiple is 3 x - most is usually 4.6 x - would really love to know how to get 6 x

_Andy_

The company I work for will usually go 5x joint if the affordability is OK, but 6x is just ludicrous and irresponsible. But I'm also curious to know which company offered you this!

AndrewSmith

6x joint salary, rising interest rates, slowing housing market =

FINANCIAL SUICIDE

lisyloo

slowing housing market

Hi Andrew,

Can you tell me which figures you are looking at please?
Many reports are saying they are "accelerating".

http://news.bbc.co.uk/1/hi/business/6043192.stm

I am not saying this is necessarily a good thing, but I would like to know what figures your statement is based on.

Dead_Eye_Jones

It all depends on your circumstances. I did very well out of taking up a large mortgage, but then I spend very little each month and have no debts or hp or infact any finacial commitments. Ive therefore been paying off double my repayments and the missus is now chipping away at it too - we are hardcore MSEs ! Add in that we were both expecting to progress our careers as we are hardworking and ambitious, and it was clear to us that the multiple would come down quickly to a "normal" level - and it has!

Going for the house saved us going via a flat in a less favoured area and ultimately saved us perhaps £5000 in fees and moving costs, we were also lucky to get the a mortgage at the lowest point in the market and thankfully fixed this for a few years so we knew exactly what our commitment was.

I think only you can decide what risk you are prepared to take, and it sounds like you are fully informed. Chat to an IFA for some proper advise . But there are two sides to every story, do you feel lucky punk, well do ya?!

AndrewSmith

Yes I too saw that news report this morning.

I am basing it on the fact that I deal accross the UK with property on a daily basis and have done for a number of years.

They also, whilst implying that they refer to the UK as a whole, focus mainly on London in isolation.

Look at it this way, if there really was a national acceleration of house prices why are a vast number of estate agents finding that larger properties are stagnating on their books and the number of 'down valuations' by surveyors is on the increase?

ReportInvestor

I thought this was a perceptive analysis of the London effect by Richard Dyson

silvercar

6 x salary may be a headline figure, but it could be a graduate or apprentice deal where there is solid evidence to suggest that the salaries will increase in the near future. Also, for those whose lifestyles are well below their salary levels there is room for manoeuvre.

lisyloo

I am basing it on the fact that I deal accross the UK with property on a daily basis and have done for a number of years.

Whilst you may have a lot of experience and your anecdotal evidence is very interesting, I think it is pushing things a bit far to make a statement about there being a "slowdown" as if it were a fact based on just your anecdotal evidence when most of the published figures are saying otherwise.

if there really was a national acceleration of house prices why are a vast number of estate agents finding that larger properties are stagnating on their books and the number of 'down valuations' by surveyors is on the increase?

There are 3 reasons that I can think of.
1) You are actually right and a genuine slow down is on it's way (I still don't think this justifies stating it as if it were fact).
2) It's temporary (like we saw in August last year).
3) It's seasonal variation.

To be honest I don't pretend to know.
You may be correct.
I just don't see a basis for stating there is a slowdown from the official figures (and I've been hearing anecdotes about doom and gloom since 2001 when some people sold to rent).

kenshaz

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04 October 06

• Lack of supply sustaining house prices rises - average prices up by 0.4% in September despite recent rate rise
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  England & Wales: Sep 2006
  
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  Price Change0.4% Viewings to
  Sales Ratio11 Sales to Asking
  Price Ratio95%
  
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