Friend+Gf applying for m.gage- what %?

bob_dob

Hi,
A friend of mine and his girlfriend have £15,000 of savings and are soon going to be applying for a mortgage of £115,000.
He is a good friend.
He earns £20 k and his gf £15k.
Their credit record is quite good with no missed payments but also not a history of, say, credit card payments and are on pay as you go phones.

My question is are they likely to get a mortgage using these factors? And if so, what would their repayments be on a, say, 25 year deal?
Thank you.

betmunch

No history of credit and a small deposit, I think they may struggle, but its going to be the Lender that makes the decision, not us guys on here.

Repayments will be dependent on the interest rate, find a mortgage calculator, pop the interest rate in with the loan and term and bobs your mothers brother.

I would recommend they have a sit down meeting with a good local mortgage Broker rather than you give them figures.

Good Luck

bob_dob

Thank you.
Yes i totally agree. Although i believe they are going to see an IFA and not specifically a mortgage broker. Can an IFA do both?

Regarding the interest rate, that's what i was trying to get a rough guide at using the criteria i mentioned you see.

betmunch

An IFA can do mortgages as well as all the investment and pension stuff, however, I would suggest seeing a Mortgage Specialist, although I am obviously biased! There are even some IFA's that cant be bothered with mortgages and will refer mortgage clients to someone else.

I wont give you an interest rate as I havent done a full fact find with the clients so I dont know whats suitable for them, some others might though, some guys here are happy to quote lender xxxxxx has x.xx% available.

bob_dob

Oh and what is the standard multiple of a couples' joint annual wage that lenders normally use?

bob_dob

Thank you for your answers. They have been very useful!

bob_dob

Hi,
Can anyone please help me with the couples-income multiple question?

And if one of the couple had just started her latest job 3 months ago, would this have a bearing on the ability to get a mortgage?

cabbage

whatever happens, plan for the unexpected and ensure the property is bought as tenants in common rather than joint tenants and get a statutory declaration signed by both parties on what would happen if they went their separate ways.

bob_dob

Wow, thanks for that. There is so much that i and my friend dont know.
Please can i ask 2 questions:

1, why is this so? What is the difference between the two?
2, how much should my friend expect to pay an IFA/Mortgage broker to find the best rate, by way of a fee?

bob_dob

Hello, anyone?

betmunch

1. Tenants in Common means that they will set which portion of the house either of them owns. Joint Tenancy means that they are both jointly liable for the whole house.
2. Depends on what they charge round your way, some dont charge, some will charge rediculous fees. What are you comfortable paying?

With regards to point 2, whoever they see should disclose how they are paid at the start of the first meeting, if its not acceptable simply do not proceed.

With regards to the couples income multiple, most lenders use affordability calculations now where they work out the applicants disposable income and then say they can use up to xx% of it to pay the mortgage at a nominal interest rate. Sorry thats no help. In simplistic terms if its over 5 times their income, forget about it. They closer you get to 5 times the less lenders will be interested in them.