Can I borrow this much and from who?

cem

Hi all, this is probably a question for brokers to see if the below can be done..

On a salary of £30k (basic), full time permanent job of 2 years, no debt or bad history..Can the following be borrowed? and which lender would it be ?


Property value: £185k
Deposit: 15%
amount to be borrowed: £157.25k
Property type: Ground floor leasehold 3 bed flat in London. 6 story building but flat has its own entrance to the outside.

Many thanks

originalmiscellany

Top of my head I'd say no... You're looking at a 5 times salary borrow, and I don't think anyone will let you in these frugal times

cem

hmm so max that can be borrowed is £150k! Pants!! I would have thought C&G may have done it :-s

beecher2

I doubt if any lender would give your 150k - I don't think the above poster is telling you what you'd be likely to get, but warning you that 5 times salary is probably unobtainable. How could you afford that size of mortgage anyway - have you worked out what the payments would be?

cem

yes putting it that way, 5 times amount may be tough to get.

By my calculation, the interest only payments on 157k would be around £720pcm (assumed interest rate of 5.5%) which is affordable as well as putting a bit aside every month to clear after 25 years...hmm..perhaps time for joint application to push up the salary..

beecher2

You'd need to give evidence of how you were planning on paying off the capital - a better plan that putting a bit aside each month would be needed. A repayment mortgage would cost you £965/month.

Yorkie1

As Beecher2 says, lenders are getting more careful about IO mortgages - and most will require evidence of the repayment vehicle for the capital at the end of the mortgage. Taking the payments for this into account, I'd guess that a repayment mortgage will be no more expensive overall - and much safer when assessing likelihood that the mortgage will be paid off.