getting a mortgage

Victoria270385_2

i think im gonna ask a really stupid question here, but here goes.

If a house is worth £95,000....and say we have £15,000 deposit, do we still need a £95,000 mortgage but the £15,000 is used as a lump sum payment of the mortgage straight away or do we just need £80,000 mortgage?

Thanks

Victoria

DannyboyMidlands

Ok, my face is twitching with the urge to be rude but I won't. If you don't understand something you should always feel you can ask questions.

Your mortgage would be for £95k - £15k = £80k.

That gives you a loan to value (LTV) ratio of 85% so you might get a reasonable mortgage deal.

Victoria270385_2

so obviously it was a stupid question haha. Basically i cannot get a mortgage through bad credit, hubby can get max £90k if its 5 x his wage which i know is very rare. On 4 x his wage he could get £72,000...but that wont get us anything really where we live....so could we get a £95,000 mortgage if we had £23,000 as a deposit or does it not work that way

[Deleted User]

I'd work on the basis of being able to get 4x salary.. 5 is very optimistic.

It's probably worth talking to a mortgage broker (or just go and have a chat in the bank)

Jeffrey_Shaw

Advice: using 'deposit' to mean 'balance of purchase price' can cause confusion. Really, 'deposit' means the [usually] 10% of price paid at exchange of contracts; nothing to do with whether or not there's to be a mortgage.

sonastin

You could get a £95,000 house if you have a £23k deposit and a £72k mortgage.

Mortgage + deposit = purchase price.
Mortgage/purchase price = LTV (Loan to Value)

Lower LTV means better rates and easier to arrange mortgage - the banks look more favourably on "borderline" cases with a low LTV.

The amount you can borrow isn't just a multiple of salary - the bank will look at other outgoings (e.g. other loans, childcare, etc) to decide if they think you can afford the repayments.