How much leeway in salary multiples?

tigerminxy

Hi - a few weeks ago, while I was doing some initial research we were told we could expect to borrow up to £200k on a mortgage. (I've recently gone self-employed so it's based on just one person's salary and we don't want to over-stretch ourselves anyway).

Some of the houses we're looking at would require us to borrow about £210k rather than £200k. Thing is, we have around a £175-180k deposit (£80k of which is in cash) so I'm just wondering if anyone out there can tell us if we'd be able to get away with borrowing just a little bit more without having the interest rate jacked up.

I'm keen to avoid locking into a higher rate on the whole amount simply because of the tiny amount extra we need especially as I'm actually bringing in some money (albeit not certified accounts) that isn't being taken into account.

TIA.

Madiba_2

I am not sure, but cant you get a loan for the extra amount?

tigerminxy

My only concern is that the mortgage offer might be reduced to take into account the loan repayments, although thinking about it, I guess we could take out the loan after we've got the mortgage. Seems a bit dishonest, though.

I should have said in the original post, we have no outstanding debts since we've paid off all our loans and credit cards with, the only debt would be the mortgage. (Another reason why I'm reluctant to take out a loan since I want to focus on just reducing a mortgage as quick as possible.)

Rick62

What are your earnings? And what is the rest of your deposit if not cash?

tigerminxy

My earnings are variable since I'm in the early stages of setting up a business. A pessimistic prediction would be £15k, a 'realistic' one would be more like £25-30k. My concern is that there's no way I can prove this since I don't have a track record.

The rest of the deposit is equity in our current home.

Rick62

And your partners salary?

tigerminxy

Approximately £42k basic + 10% car allowance. Bonuses double this amount and she does meet her targets so we can show she earns much more than her basic salary.

cupid_s

I would think they'd be likely to stretch to another 10k. You'd have to ask.
As you have such a large deposit it would work in your favour.

You only require 5x your partners individual basic salary which isn't ridiculous. We got a 5.2x mortgage based just on husbands money although the interest rate was higher than what we could have got elsewhere (but elsewhere wouldn't give us 5x salary). Without my money we would completely struggle but we manage fine as long as I've got money coming in. You'll have your wages as well as any bonuses your partner gets so I can't see they'd think you can't afford it.

But I'm not as mortgage advisor - what do I know!?!

Rick62

Your partners basic salary (inc car allowance) should easily cover £210,000. Not sure if bonus is £8 (double car) or £84k (double salary), but either way you should be fine.

tigerminxy

Thanks. The bonus doubles the salary is what I meant, so it is another £42k-ish on top. I just wasn't sure if the bonus would be taken into consideration.

Rick62

Most lenders will take about 50% of a bonus, some lenders will take all, particularly if it is regular.