Applying for a mortgage which is more than the earnings ratio....

PJD

Two brokers have put forward their best 5 year fix deals that they can find, - but I have found a MUCH better deal myself with First Direct (who do not go use brokers). However, First Direct say they will only lend 3.5 x yearly salary, and I want to borrow 4.5 x.

I do however have a reasonable deposit - 73% LTV. And for the past 7 years I have been getting a good amount of regular overtime (which I still get) which, - if counted, means I'll be borrowing about 3.8x annual salary.

I have a current account with first direct, and ISA and a regular saver. They can see by my accounts that I can, very comfortably, meet the monthly repayments on the 5 year fix that I am interested in.

Furthermore, my girlfriend may move in with me in the not to distant, and even if she does not, worse case scenario I would get a lodger in, or, rent the property out altogether (which, again, would more than meet the repayments).

First Direct are calling me back tomorrow to discuss it further, to see if anything can be done.

Has anyone any tips on what I should say to present my case in a good light so they will accept my mortgage application?

PJD

Just seen a fantastic offer from the YBS!! And I fit their criteria according to their 'how much can i borrow calculator' - wow, - what a fantastic deal - beats everything else i've seen by a big margin... - i'm just searching for the catch! gotta be one somewhere!!!!

handytips

PJD. Yours is a classical case of 'I can do it better myself'. The brokers should know which lenders will lend. First Direct will not and if they did and i was the broker i would report them to the FSA for breaking their own rules (3.5 income) each and every lender has its own criteria and affordability modules. At the end of the day you should be asking yourself. Do i want a mortgage or not, six weeks down the line and you could still be without a deal. The rate isnt everything and that is GOOD ADVICE.

PJD

I have arranged a couple of mortgages before and the brokers I used were superb. I used two actually, the one from the EA, and a recommendation. The recommendation found me a fantastic deal of which the one from the EA advised me that I wouldnt get. The recommended IFA presented my case in a different light and i was accepted.

What I'm saying is that I dont stubbornly believe that I 'can do better myself' - i'm just researching all options for my own piece of mind.

The YBS calculator tells me that they will also lend me the amount i'm looking for, - and that is a much better deal than what the MA has come up with.

The rate is 0.4 cheaper, - I can make overpayments, and the product fee is £800 cheaper.

You mention that it's not just the rate.... - is there anything else (other than what I have mentioned above) that I need to consider?

Thanks for posting

somethingcorporate

Follow-on rate.

Just be mindful if you intend to let the property out you are changing the terms of your residential mortgage (and obviously ONLY at the discretion of the lender).
This could also be a consideration.

PJD

The follow on rate which is nearly always a SVR i'm not OVERLY fussed about, as that will be in 5 years time, so who knows what that will be and it's no problem (no charge) to change to another product at that point.

BTL'ing down the line is a very good point, thanks.