Mortgage Affordability

kevsan

Hi,

I am looking to remortgage to Nationwide from the one account, and everything is going through... just need to send back the paperwork.

However, we were looking to leveraging more money for improvements etc, but both the nationwide and oneaccount limited the amount due to affordability, which had nothing to do with LTV...

Does anybody know how affordability is worked out...

Did some digging and apparently your mortgage should be about 28% of your gross monthly income, and ours is under that. Then it also said (this was on eHow by the way, so not sure how accurate it is) that total monthly outgoings shouldn't be more than 36%. That's where we'd fail, because we also pay nursery fees, plus elec/gas/water/council tax/food etc.

Do many people have 64% of their monthly wage left over after monthly expenses?

We have about 10% by the time everything's paid for / put aside for future payments, and we barely have any debt, just standard outgoings.

Does anyone know if those figures are correct, or if its a bit of smoke and mirrors on behalf of the banks to protect themselves from overlending???

Any accurate affordability stats would be good.

Senior_Paper_Monitor

Use the affordability calculator on the Nationwide website.

Affordability calculation varies by lender.

somethingcorporate

Smoke and mirrors. The banks keep all their underwriting and affordability calculations under wraps so we can only speculate.

At the end of the day you are asking to borrow their money and they can add whatever terms or calculations they like to increase or limit that amount as they see fit.

Have you tried talking to a broker?

You say it is not LTV related but can you tell us what your house value is, mortgage value and monthly income and any other credit commitments are just to make sure that this is actually not an issue?

Senior_Paper_Monitor

Approaching lenders on an adhoc/speculative basis (probably on who theoretically offers lowest interest rate at the LTV you presume you want) is a good way to rack up muliple credit searches and harm your ongoing eligibility.

A broker will use use multiple source calculators, experience and direct contact wjhere necessary to identify the best lender for your requirements (without searches until the most likely lender is identified).

Conrad

Lenders largely rely on what you tell them. If you tell them you have 4 children for example, they have no choice but to reduce the available loan size. If you approach a broker, ensure they also consider direct to lender deals. A good broker will not discrimiate along commision lines.