changing to interest only

cumbria_mortgages

Do you have an isa?

If you do you can send them prove of your isa as a repayment vechicle and start saving in to there. Usually lenders just ask for a account and it doesn't matter how much is already built up in it as long as you have one there.

Hope this helps

kingstreet

mcc - while I agree with some of the points you've raised, you're ignoring one fundamental.

Many lenders still use income multiples and in that case, the choice of a repayment or interest-only mortgage would have absolutely no effect.

If they'll lend you four times your income, this can't be manipulated by your ability to cut the mortgage cost by a hundred quid a month.

Now those lenders using affordability calculators could obviously do what you're describing if they used an interest-only payment in the body of the calculator... :eek:

I forgot to mention, those of us giving advice have had to justify why we've recommended interest-only and why it's suitable for years now. It's the places you can go where no advice is being given that are the problem and that's where no advice = no missell!

mcc100

kingstreet wrote: »

Many lenders still use income multiples

Yes you're right, many use them now.

However back in 2005 many either didn't use them or allowed ridiculously high multiples .....

supersaverwannabee

cumbria_mortgages wrote: »

Do you have an isa?

If you do you can send them prove of your isa as a repayment vechicle and start saving in to there. Usually lenders just ask for a account and it doesn't matter how much is already built up in it as long as you have one there.

Hope this helps

I do have an isa with nothing in it!! lol would this be enough do you think?
thanks

onlyroz

mcc100 wrote: »

However back in 2005 many either didn't use them or allowed ridiculously high multiples .....

They still are, aren't they? I just had a look at the First Direct mortgage calculator, which uses 4.5x salary :eek:

Bigmoney2

onlyroz wrote: »

They still are, aren't they? I just had a look at the First Direct mortgage calculator, which uses 4.5x salary :eek:

My current mortgage was 4.5 x salary. Not with first direct though.
The lender went on affordability and as I had no other loans/debt offered that multiple.
9 years later no problems with paying mortgage, have increased savings again, this is on a single average wage. So high salary multiple isn't neccessarily bad or unaffordable.