Mortgage Newbie, how much I can get

linda008

I've read the Mortgage guide on this forum and as I understand loan companies normally offer 3-4x of salary. A typical salary in London could be a, let's say, £30k. With this the max amount one can get might be £120k. With £120k you can't afford a rat hole in London.

So my question is how do people manage to buy house in London (think of greater London and outskirts)?

kingstreet

£120,000 is the mortgage. A deposit will be required in addition to that to increase the purchase price available.

So my question is how do people manage to buy house in London (think of greater London and outskirts)?

I'm sorry to put this bluntly, but this is the Mortgage & Endowment board. We're here to answer mortgage questions and give advice. This is a bit beyond our scope. If you want to discuss property prices, it might be worth posting on the Debate House Prices forum.

smartiedriver_2

Not all financial institutions use salary multipliers. Some use affordability. If you have very few outgoings and no debt, you can find an affordable mortgage works out to 5 or even 6 times salary, and is still granted.

But obviously, you would still need a deposit on top.

The_Palmist

linda008 wrote: »

I've read the Mortgage guide on this forum and as I understand loan companies normally offer 3-4x of salary. A typical salary in London could be a, let's say, £30k. With this the max amount one can get might be £120k. With £120k you can't afford a rat hole in London.

So my question is how do people manage to buy house in London (think of greater London and outskirts)?

Start thinking along the lines of "how much can I afford to repay every month"

Parent contributions along with any saved deposit plays a big role in buying a property anywhere.

linda008

smartiedriver wrote: »

Not all financial institutions use salary multipliers. Some use affordability. If you have very few outgoings and no debt, you can find an affordable mortgage works out to 5 or even 6 times salary, and is still granted.

But obviously, you would still need a deposit on top.

Makes sense. Tx

m00m00

6x salary ?

maybe in 2006

if anything the multipliers are coming well down.

the other point the OP is missing, is that usually there's 2 wage earners buying a house, so the amount loaned is a multiplier based on the sum of 2 wages

the other point about london house prices is a valid one, and even more so when you consider the vast amount of people earning less than average wages in London

bodmil

You have to save for the rest!

brit1234

smartiedriver wrote: »

Not all financial institutions use salary multipliers. Some use affordability. If you have very few outgoings and no debt, you can find an affordable mortgage works out to 5 or even 6 times salary, and is still granted.

But obviously, you would still need a deposit on top.

Hardly sensible to borrow that much, after all reckless lending caused this mess.

The original poster is best to keep between 3-4 times salary and save a deposit. The London market is starting to turn downwards now except central parts. A few years saving a deposit and with the prices falls.

linda008 wrote: »

So my question is how do people manage to buy house in London (think of greater London and outskirts)?

Fraud, watch the link below:

http://www.youtube.com/watch?v=vT1UnGS91BY

luciano

It's not only how much you can get but also how much you feel you can be paying back. Dosen't matter what is your income but how much of that income stays in your pocket. For a start I'm sure you can pay at least as much as your current rent (I presume you are renting). Think how muhc you can put on top of that and go to this mortgage calculator and keep changing the "mortgage required" to fit with the payment to your limit.

linda008

bodmil wrote: »

You have to save for the rest!

Yes! Like, bank overdraft charges, parking fines, traffic camera cockups, etc etc...

linda008

luciano wrote: »

It's not only how much you can get but also how much you feel you can be paying back. Dosen't matter what is your income but how much of that income stays in your pocket. For a start I'm sure you can pay at least as much as your current rent (I presume you are renting). Think how muhc you can put on top of that and go to this mortgage calculator and keep changing the "mortgage required" to fit with the payment to your limit.

Tx for the link, but I don't see how much I've to pay monthly? am I missing something?