how much will they allow?

Bubbles17

Hi all,
Wonder if you can help us. My husband and I are now looking to move we have had enough of our house. I have fallen in love with a certain house but we have to wait until next wek to see a financial advisor to see whether we will be able to get a mortgage for it. Our current property is worth around £100,000 the house we now would like is £170,000. My husband is on £23,000 per year and £10,000 overtime. We have a £4000 loan and £1800 on credit cards. We bought our house for £51,000 so we will have made a bit of profit on that. Do you think they will give us a mortgage to cover that? And how can I be sure our financial advisor will give us the best deal ie not the ones he is paid to tell us to choose.
Your help will be so appreciated, thanks in advance.

UK007BullDog

You need to see an Independent Whole of Market Mortgage Broker. Ask if they are on a panel or not and if they are if they can go off panel if there are better deals about.

Have you spoken to your current lender?

Just looking at the figures it looks very tight. The only way I can see it if you sell your current property and use the £50K as a deposit towards the new property.

His income alone would not support it even when choosing a lender who will take 100% of the overtime into account without selling current property. Usually lenders take 50% to 60% of the overtime. The overtime has to be guaranteed. Do you work by any chance as any kind of income would help.

If due to affordability you both think you can do it but full status does not fit you could go self cert, however the costs there are higher.

Have you made a budget plan first of all of all your outgoings? And then see if you could support a mortgage which would be nearly 3 times as much as you are paying now. Don't forget stamp duty and all the other associated costs.

UK007BullDog

Forgot to mention please read all of he mortgage guides as a refresher for you on this website.

Bubbles17

No I don't work unfortunately. We were planning on putting the 50k as a deposit. How much roughly would a mortgage of that size work out per month then? Thankyou so much for your help so far. Apologies if I sound a tad thick but hubby deals with all the mortgage etc but I am just very impatient to find out whether we will be able to afford the new house.

herbiesjp

You think you will sell for £100k, but what is the mortgage on the current property? Assuming £51k left, you have 100-51 = £49k equity

So keep say £5k back to cover fees etc.

You have £44k to put as a deposit, which means a mortgage needed of £126k on a sole income of £23k plus overtime (which some lenders will only take 50% into account) so another 5k = £28k

You do not say what the montly loan payments are, so say £150 pm = £1800 which needs to be taken off your income and extra to cover the credit cards.

So £26200 roughly to achieve a mortgage of £126 k

What goes in your favour is the potential deposit you have to put down - so there may be a few lenders that could look at this for you

I would suggest having a word with a fee free whole of market adviser to look at all the figures in detail, and see if it will indeed work out for you, and if it is the right move for you.

Over 25 years on a repayment mortgages basis you could be looking at monthly repayments of £740pm approx

HTH

Tustastic

Bubbles17 wrote:

No I don't work unfortunately. We were planning on putting the 50k as a deposit. How much roughly would a mortgage of that size work out per month then? Thankyou so much for your help so far. Apologies if I sound a tad thick but hubby deals with all the mortgage etc but I am just very impatient to find out whether we will be able to afford the new house.

Hi Bubbles17, I completely agree with the comments above by UK007BullDog. I have bought and sold a few properties but I still learnt a lot from the mortgage guides on the main part of this site.
But you can also have some harmless fun by going to a site like moneysupermarket.com and using the mortgage calculators to see whether you can afford the kind of sum you are looking to borrow. HTH:)

raq

herbiesjp wrote:

You think you will sell for £100k, but what is the mortgage on the current property? Assuming £51k left, you have 100-51 = £49k equity

So keep say £5k back to cover fees etc.

You have £44k to put as a deposit, which means a mortgage needed of £126k on a sole income of £23k plus overtime (which some lenders will only take 50% into account) so another 5k = £28k

You do not say what the montly loan payments are, so say £150 pm = £1800 which needs to be taken off your income and extra to cover the credit cards.

So £26200 roughly to achieve a mortgage of £126 k

What goes in your favour is the potential deposit you have to put down - so there may be a few lenders that could look at this for you

I would suggest having a word with a fee free whole of market adviser to look at all the figures in detail, and see if it will indeed work out for you, and if it is the right move for you.

Over 25 years on a repayment mortgages basis you could be looking at monthly repayments of £740pm approx

HTH

How come my interest only until next september on a £130,750.00 mortgage is £719.00. Yet the repayment is £740.00 per month ?? All depends who the lender is ??? Or what mortgage offer you take out.

Interesting to know ....

herbiesjp

As you say, it depends on your deal and your circumstances

Are you on a rate of around 6.6% ?

raq

Yeap I certainly am.. Is this middle of the road rate or pretty high ?? We did have self - cert by the way, although we also put down £75k

herbiesjp

That will explain the difference in rate.

Not sure on your details, but you can see the difference it makes on the repayment figures

raq

We are going to repayment in september of next year, I only wish it was now as we would be making a saving. Not doubting the f.a. we used as we have known him for 10 years and he got us our first mortgage. Then again when I read some of the threads on this sight I feel we are short by £200.00 a month and had the incorrect mortgage offer to us ??? Too late now I know but can't help thinking about it.

He did try a lower apr with the Abbey but was unsuccessful. Think it was down to a very small default on one of our c.cards. This has now been paid.