High Multiples Mortgage Advice needed

Ivenofinmoney

I am currently looking at buying a new property, we have found 'the one' but it's on the high end of the budget.

Here are the numbers:

Purchase Price - £337000
Existing Property Sales Price - £230000
Current Mortgage - £110000

Estimated Moving Costs - £13,000

Required amount - £ 230000

My earnings - £47000 per annum
* My Gross income as declared to the inland Revenue is over £51000 including car and fuel benefit, does anyone take these figures into account ??

OH Earnings - £6000

Our existing mortgage is an interest only mortgage with an ISA investment which is currently worth around £25000.

Using the various online calculators i can get another interest only mortgage over 25 years with a monthly cost of around £950 leaving me around £100 to continue to add to the existing investment.

Alternatively I could reduce the total required amount to £205000 by cashing in the ISA and move to a repayment over 35 years.

Note: I am expecting our available income to go up over the next couple of years as child care costs decrease and OH's earning potential goes up - not least my own career continues to climb. At which point i would look to increase the investment amount on option 1 or increase the payments thus reducing the the term on option 2.

according to the my numbers we can afford it, with a little breathing room if interest rates go up.

My question - based on my numbers have i got a hope n hell of finding a lender who will provide me with a mortgage of this value ??

Does either of these options look better than the other ?

is there another option i haven't thought off ??


Look forward to your responses !!

Leon_W

You don't say if you have any other debts or previous poor credit, but if not, I'd say you would be absolutely fine. (Nice deposit BTW)

Obviously not all lenders will go that far but I can think of a few high street names off of the top of my head that should be able to assist.

Any broker worth his salt should be able to help. Seek the help of a whole of market, fee free broker.

Best of luck.

herbiesjp

Based on the raw figures the scenario does indeed look do-able.

The choice as to interest only vs repayemnt has to be yours. Switching to repayment guarantees clearing the mortgage at the end of the 35 year term.

Interest only relies upon the performance of your ISAs currently.

It depends on your risk profile and whether you are happy to carry on this way, or whether it has changed since you set up the interest only mortgage

HTH

Leon_W

Just to add to what herbie says above.....

If it were me I think I'd stick with the interest only option for the time being as I think the options are more flexible (you can always change your mind) and reduce payments if needs must etc etc

No advice intended and just my own personal opinion.

Ivenofinmoney

Thanks for your responses guys,

No adverse credit history.

i have got some credit card debt on 0% which is stoozed in a savings account, so i can pay that off before i apply , my attitude hasn't changed much, but i haven't been fantastically impressed with the ISA performance over the past 8 years, So I would like to move towards a repayment basis.


Thanks

Ben