Applying for a mortgage whilst on a sabbatical

Annie1972_2

Hi there,

Myself and my OH wish to apply for a mortgage to purchase a property at £450,000. We have a 40% deposit. I don't think we would have a problem ordinarily as we each have an income ivo £50,000 p.a. However, I have just started a two year sabbatical - will be totally unpaid for the next 2 years but I am guaranteed to return to my previous employment in 2 years time at the same salary level (I'm sure I could get my employer to confirm this in writing). Are there likely to be lenders that would be prepared to lend approx 5* my OH salary to cover the purchase? We have approx 12,000 cash savings plus approx 7-10,000 in stocks and shares and 30,000 in ISAs.

kingstreet

Halifax and Abbey do 5x for high score, low LTV cases. They will make deductions for dependents, existing credit etc.

I take it you weren't planning to move? Doing this before your break would have been a little easier.

Annie1972_2

Thanks for the tip. I'll give them a go. We have been planning to move for a while - have had to withdraw from one house as lots of problems showed up on the survey and a second house was withdrawn when the buyer got cold feet. We were hoping to move before my break but life is never that simple...

mij544

OK, basically you are saying that you can put down £180,000, leaving a mortgage amount of £270,000.

whilst you don't say how long you want to repay the mortgage over, or if you would want capital and interest/interest only, I am going to make some basic assumptions of repayment and a 20 yr term with a rate of around 3.5%.

This would equate to monthly payments of £1,580 a month which would be outside affordability as based on other half's salary you would be borrowing 5.4x income.

The fact that you had a job still or savings would not be of interest to an underwriter.

Only way forward I can see (and please other brokers feel free to chip in if i have forgotten something as it's been a long day!) is to either return to your job, or use the savings you mentioned to reduce the loan amount to 5 times your other half's salary.

Hope this helps,

Mike