Mortgage Question

Simple.User

Hi,

I have a question, which I hope doesn't sound too simple, but something really just doesn't make sense to me.

You read everywhere in the press, in regards to mortgages and homebuying, that you need at least a 10% deposit to get a mortgage.

What doesn't make sense to me, is that when these things are talked about, salary multipliers are never talked about, yet this seems to me to be the biggest stumbling block?

I live in the South East, and say for example I want to purchase a 2 bedroomed home, to start me off on the properly ladder, at a cost of £200,000.
I could potentially get a 10% mortgage for £20,000 deposit (I know that a higher deposit would mean a higher LTV meaning a better rate), leaving £180,000 to mortgage.

After reading around it seems that most lenders will go 4 times your salary, so I would need to be earning £45,000 a year just to buy a small 2 bed home.

Is this really the case or am I missing something?
Does each case gets seen individually or is it just a one size fits all solution?
Looking back through my bank statements I have shown that I could afford the mortgage payments etc earning less than £45,000, would this be taken into consideration?

Many thanks,

ghstyler

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DannyboyMidlands

You are dead right and not missing anything. Thats why prices are falling in much of the country - people simply can't afford them. Self cert liar loans and offset mortgages used to "help" but they are now being withdrawn.

All banks are different but 1st Direct recently offered me and my OH a maximum of 2.7 times joint income.

kingstreet

The deposit issue affects more people, as it affects the whole country.

Income multiple limitation is a factor of high house prices and that probably affects the South East more than anyone else.

That's not to say you can't be affected by both wherever you live.