How much borrowing allowed?

ANGLICANPAT

Is it the case that the bigger your deposit, the more 'multiples of salary' would be allowed ?
What is the approx maximum one could expect to borrow with a 10% mortgage with an income of 77k?
As we could maybe remortgage a property we already own outright, we could increase the deposit significantly on the new one. Would this give us a better chance of a higher amount? (or would we be unlikely to get a remortgage if we're renting it out to cover the mortgage on the new prop?)
Obviously I dont expect precise figurework here , just an idea of whether we would need to abandon the idea of buying altogether before wasting both ours and a MB's time . (Im presuming if I put the above questions to a MB, hed require appointment and paperwork etc , rather than a quick ' maybe 'or def 'no' on the phone)

Also, would paying off £50 on a store credit card , a few weeks late in recent years be a concern re credit history?

CKhalvashi

ANGLICANPAT wrote: »

Is it the case that the bigger your deposit, the more 'multiples of salary' would be allowed ?
What is the approx maximum one could expect to borrow with a 10% mortgage with an income of 77k?
As we could maybe remortgage a property we already own outright, we could increase the deposit significantly on the new one. Would this give us a better chance of a higher amount? (or would we be unlikely to get a remortgage if we're renting it out to cover the mortgage on the new prop?)
Obviously I dont expect precise figurework here , just an idea of whether we would need to abandon the idea of buying altogether before wasting both ours and a MB's time . (Im presuming if I put the above questions to a MB, hed require appointment and paperwork etc , rather than a quick ' maybe 'or def 'no' on the phone)

Also, would paying off £50 on a store credit card , a few weeks late in recent years be a concern re credit history?

This would completely depend on your circumstances.

For someone that is 27, husband 29, av. 3 years earnings approx. £161k and £114k each year, we were offered £900k mortgage on £1.35m house, with £450k-ish deposit (we are mortgage free, house worth £400k). :eek:

This is stretching the limit as far as we could, to the extent that we decided not to buy the property, however 2 children (8 and 10) and plenty of available credit (although card balances go to around £4k/5% over a month and OD's are never used) put us down on this one.

The best thing to do would be to speak to a mortgage advisor and discuss terms in your specific circumstances.

Vika

ACG

The general rule is approx 4x your income.

This can be more or less depending on your circumstances and the lender.

For instance 4x your income if you are nearing retirement is different to 4 times your income if you are 21. Also if you have other loans etc this will be taken into account. A 1 off late payment in the last few years shouldnt be too much of a problem.

Go and see an advisor they will give you a better idea.

kingstreet

ANGLICANPAT wrote: »

Is it the case that the bigger your deposit, the more 'multiples of salary' would be allowed ?

No. Lenders tend to have set maxima. Halifax and Abbey go upto 5x, Nationwide around 4.7, others around 4x. The credit score you achieve will sometimes influence the lending maximum, as will the number of dependents you have, the mortgage term and your existing credit.

What is the approx maximum one could expect to borrow with a 10% mortgage with an income of 77k?

With no dependents, no credit, a longer term and a good credit score, the most is £385k. A more realistic maximum giving you greater product choice would be £308k.

As we could maybe remortgage a property we already own outright, we could increase the deposit significantly on the new one. Would this give us a better chance of a higher amount? (or would we be unlikely to get a remortgage if we're renting it out to cover the mortgage on the new prop?)

If you plan to let the property, you could remortgage it to raise a higher deposit. It would mean the overall profile of your borrowing would change and a mortgage of less than 75% on the new property would get you a better rate. It wouldn't get you higher borrowing power and in some cases, the lender for the purchase may "charge" you for the remortgage by reducing your borrowing power. Some lenders will allow you a self-funding let in the background without charging you for it.

Obviously I dont expect precise figurework here , just an idea of whether we would need to abandon the idea of buying altogether before wasting both ours and a MB's time . (Im presuming if I put the above questions to a MB, hed require appointment and paperwork etc , rather than a quick ' maybe 'or def 'no' on the phone)

TBH the more you put in, the more you get out.We can't tell you whether you can do this, or not, because you aren't going to sit answering the questions needed for a factfind. You need to do that with a broker. Investing an hour to investigate your options appears a sensible use of your time, IMHO.

Also, would paying off £50 on a store credit card , a few weeks late in recent years be a concern re credit history?

It won't help, but it may not be a major issue. Again, your broker needs to know about this along with all the other data he'll request. If you want to be really thorough, obtain copies of your credit files from all three CRAs before you go.

The £2 statutory ones will be fine. Don't mess about with the sites you pay for, or the credit score ones.

Equifax

https://www.econsumer.equifax.co.uk/consumer/uk/gb_consumerletter.ehtml

Experian

https://secure.wiseconsumer.uk.experian.com/wiseconsumer/secure_index.html?data=00

CallCredit

https://www.callcredit.co.uk/stat-report-online/index.php?action=register_display&tpl=regPurchase

ANGLICANPAT

Thanks for all the help , absolutely great. Why 3 credit checks though, shouldnt they all show up the same things?

kingstreet

All three files?

Because they SHOULD all show the same things but sometimes things are present on one, not on the others.

A thread on here yesterday concerned a particular lender's choice of CRA as there was an adverse entry on Equifax which wasn't present on Experian.

Let's just say it avoids unpleasant surprises at the application stage.

ANGLICANPAT

Ah, I get it , thanks.