FTB looking for advice

sw1tchbl4de

Hi guys,

I have a deposit of £30000, and a salary of £27040. My credit is perfect (never had a credit card) and the only 'debt' I have is my student loan.

I went into HSBC yesterday just to see what they would lend me, thinking I had done my research on the net and I would probably manage to get just enough.

They said they'd only lend me £94500. I was hoping to look at places around £160000, so obviously this was disappointing. I was sure I'd done my research so when I got back to work I checked their online mortgage calculator and noticed that they have a choice between calculating the mortgage based on the property value or based on your salary. When I checked against the property value it said they'd lend me £120000, which would almost be enough.

So, I have a couple of questions hopefully you guys can help me out with:

1. Should I go back/call them and explain about the online checker or would that be a waste of time?

2. Is there anyone in London/UK/The World that would lend me £130000 based on my current situation or am I kidding myself?

Sorry if you guys get lots of questions about FTBs... I'm sure you do. I just thought that with the specific figures it was worth starting my own thread.

paint

sw1tchbl4de wrote: »

I checked their online mortgage calculator and noticed that they have a choice between calculating the mortgage based on the property value or based on your salary. When I checked against the property value it said they'd lend me £120000, which would almost be enough.

Mortgages will be based on affordability, which is generally perceived to be a multiple of your salary (less things like outstanding debts etc.). In the current climate you'd be lucky to borrow 4 x salary - more likely 3 or 3 x salary. Looks like they're offering around 3.5, which is pretty much average.

Also, with regard to your credit being perfect, I'd be inclined to get a copy of your credit report from one of the 3 agencies for £2 (equifax, experian, call credit) just to verify that. You may have a lack of credit history, which could count against you.

sw1tchbl4de

paint wrote: »

Also, with regard to your credit being perfect, I'd be inclined to get a copy of your credit report from one of the 3 agencies for £2 (equifax, experian, call credit) just to verify that. You may have a lack of credit history, which could count against you.

The guy at HSBC said it was perfect when he did a credit check... would he lie? (I mean that sincerely. I'm a bit suspicious of banks!)

The_Palmist

I doubt HSBC will lend you any more. They seem to be tighter than others. You need to raise your deposit a bit more. Try Halifax but please make sure you can afford the repayments.
It might not be such a bad idea to buy later when you have more deposit or start looking for something a bit cheaper may be.

kingstreet

Nationwide's affordability calculator says £115,500 maximum.

Halifax suggests £124k for a C pass, £135k for an A pass.

Abbey says £108k for a low score, £135k for a high score.

I couldn't take into account any student loan payments, if any are made. I also used a 25 year term. A longer term may increase the maximum borrowing.

sw1tchbl4de

kingstreet wrote: »

Nationwide's affordability calculator says £115,500 maximum.

Halifax suggests £124k for a C pass, £135k for an A pass.

Abbey says £108k for a low score, £135k for a high score.

I couldn't take into account any student loan payments, if any are made. I also used a 25 year term. A longer term may increase the maximum borrowing.

What do the pass grades mean? Or the low/high score? I had a quick look at the mortgage calculators after starting this thread last night and there seems to be quite a large difference between lenders. I'm definitely going to book some appointments to have a chat with the other lenders sometime this week.

Thanks for you help everyone

Thrugelmir

sw1tchbl4de wrote: »

I had a quick look at the mortgage calculators after starting this thread last night and there seems to be quite a large difference between lenders.

Have you drawn up a personal budget plan to see if the monthly repayments are affordable?

Are you basing your view of affordability on current levels of interest rates being applicable for the whole term of your mortgage?

1. Should I go back/call them and explain about the online checker or would that be a waste of time?

Complete waste of time. A lender will make you an offer. There's no negotiation. So take it or seek alternative offer elsewhere.

sw1tchbl4de

Thrugelmir wrote: »

Have you drawn up a personal budget plan to see if the monthly repayments are affordable?

Are you basing your view of affordability on current levels of interest rates being applicable for the whole term of your mortgage?

Umm... no. (Feel like I'm at school and haven't done my homework!) I don't really know what I'm doing to be honest with you. I'm not really basing the affordability on anything other than it being considerably less per month than wages, which means I should be able to afford things.

I was kinda just gonna wing it... but I sense you don't agree with that approach...

somethingcorporate

Banks sell mortgages and it sounds like you need advice. Go and see a whole of market broker to get some impartial and guided advice. It may cost you a bit more but can save a lot in the long run.

Banks do not offer advice and they can only ever talk about their products. Get a broker and they will do the legwork for you.

sw1tchbl4de

somethingcorporate wrote: »

Banks sell mortgages and it sounds like you need advice. Go and see a whole of market broker to get some impartial and guided advice. It may cost you a bit more but can save a lot in the long run.

Banks do not offer advice and they can only ever talk about their products. Get a broker and they will do the legwork for you.

How do you find a reliable broker?

iheartbristol

Ask friends for a refferal.

In my experience the most you'd probably get from HSBC if you were an existing valuable customer is 4.5 times salary (121680)

I get the impression in the current climate that you're not actually going to get much more than that elsewhere; approaching a broker would be best because if there's lenders out there who will lend more they'd likely be aware of that.

I imagine that the guy from HSBC did a 'Decision in Principle' if he ran a credit check on you. If you've got no credit history whatsoever (which it sounds like) then I'm surprised you got a yes back. Have you had mobile phones on contract in the past?

Also, come to think of it, if he did a 'how much can I borrow' first (which he should have done) I doubt that would hav offered more than 3.5 times salary. I personally wouldn't have gone on to do a DIP if that had happened....

My experience is from a little over a year ago though so things *might* have changed.... I would tend to doubt it though