Higher lending multiples

The_Haggis

Hi

we are just about to accept an offer on our property, we have seen a house we like but it is right at thetop end of what we think we can borrow.

My salary is 30k
My wife is disabled and recieves benefits totalling 10k

we are very shrewd with our finances and can afford more than most people would be able to with a household income of 40k

at the moment we currently pay around £700 on our mortgage and manage to put £500 into savings

we need to borrow 135k which would cost us around £850 on a 5 year fixed rate

we have an AIP with nationwide for 140k, which is just a little bit more than we need.

The offer we have recieved is just enough to cover the deposit and pay for the legal fees.

my question is, are nationwide likely to change this if we were to apply for the mortgage, as we dont want to make an offer on the property only to have to let the seller down.

Thanks for any advice.

liney

I don't know the answer sorry, but are benefits really included when calcuating lending levels? That shocks me.

kingstreet

Some lenders accept state benefits but they will require written confirmation they are guaranteed for life, or as close as they can get to that, before they will be accepted.

Nationwide criteria;-

State Benefits Specifically for the Disabled

Most commonly Incapacity Benefit and Disability Living allowance.

Any benefits paid because of a disability may be treated in the same way as earned income, provided that the applicant can show a letter of entitlement or other suitable evidence to confirm the amount being paid.

We will only exclude a benefit if the applicant has been told that its payment will cease on a stated date in the near future.

We will be cautious where payment of a benefit is subject to regular review, but if we are satisfied that withdrawal of the benefit is unlikely, we will treat it the same way as earned income in the Affordability Calculation.

Haggis - as long as the information you put on the AIP and the application matches the supporting documentation you supply you should be fine. The only way you're going to find out is to get an offer accepted and put in a full application. Obviously, limit any potentially wasted expenditure by ensuring your solicitor holds searches etc until you're happy Nationwide is happy.