are there many providers that will lend 5x your salary

stolt

Hi there, if someone would be kind enough to advise which lenders will lend 5x your salary. I currently earn 36,500 per year and want a mortgage of around 170k, we have no outgoings apart the usual bills etc, ie. we have no credit card debts or car loans.

Ideally I would like to fix it for 5 years with a decent rate, can anyone help?

many thanks

robert

herbiesjp

This will pretty much depend on your whole scenario i.e purchase price, deposit, mortgage amount needed, single or married, any children, credit history, term of mortgage wanted (20,25, 35 years etc), interest only or repayment.

These are just a few of the piecec to what a lender looks at when deciding mortgage amounts.

If you are looking for a 5 year fixed rate, some lenders will offer slightly higher income multiples than normal

HTH

stolt

herbiesjp wrote: »

This will pretty much depend on your whole scenario i.e purchase price, deposit, mortgage amount needed, single or married, any children, credit history, term of mortgage wanted (20,25, 35 years etc), interest only or repayment.

These are just a few of the piecec to what a lender looks at when deciding mortgage amounts.

If you are looking for a 5 year fixed rate, some lenders will offer slightly higher income multiples than normal

HTH

hi thanks for the quick reply, we are moving up the housing ladder, selling ours for 295k which we bought for 153k, so have a decent deposit to put down, married with three children, very good credit history and mortgage term aroud 20 years.

herbiesjp

SO the property has gone up in value by £142k - you have not said what mortgage you have outstanding (if at all) but if you put down £50k of this equity (so around 77% LTV) you do have a good selection of lenders.

If you were to put down more, then lenders tend to be more flexible in the mortgage amounts

Do you also get any tax credits and benefits, as these will help also.


As always, in these type of scenario, I would urge caution. Just because you can get the mortgage agreed, does not mean it is the right thing to do. I would look very carefully at your affordability and make sure you can afford it now and in the future if interest rates increase.

As you appear to be the sole income earner just consider what would happen if you did not have that income anymore

Have a word with a fee free whole of market adviser and let them come back to you with figures for you to look at.

HTH

Mr_helpful

herbiesjp wrote: »

Do you also get any tax credits and benefits, as these will help also.

HTH

I would leave out tax credits its bit of a give away that you are skint
However there should be a few lenders happy to help but an independent broker is best place to ask.

herbiesjp

Not really - if you have 3 children, you would be entitled to some form of benefits, doesn't necessarily equate to being skint

These may counter act the decrease in mortgage amount some lenders will make due to there being 3 children.

Agreed though, that if affordability is there before the benefits, the extra income these bring in will be a bonus

stolt

herbiesjp wrote: »

SO the property has gone up in value by £142k - you have not said what mortgage you have outstanding (if at all) but if you put down £50k of this equity (so around 77% LTV) you do have a good selection of lenders.

If you were to put down more, then lenders tend to be more flexible in the mortgage amounts

Do you also get any tax credits and benefits, as these will help also.


As always, in these type of scenario, I would urge caution. Just because you can get the mortgage agreed, does not mean it is the right thing to do. I would look very carefully at your affordability and make sure you can afford it now and in the future if interest rates increase.



As you appear to be the sole income earner just consider what would happen if you did not have that income anymore

Have a word with a fee free whole of market adviser and let them come back to you with figures for you to look at.

HTH

hi yes it has increased by 142k, we have just a tad over 66k left on the mortgage to pay off, and have about 30k in savings but some of the savings we were going to use for stamp duty, moving fees etc and any left over was going to used for doing the house up (not that needs much)

we do receive family tax credit for the children which is paid into my wifes account.

Fairdo_2

You also haven't mentioned if your wife earns an income. If it doesn't then it may be worth putting those tax credits in your wifes name as income (as long as that particular lender accepts this as an income)

Some lenders will work on affordability models so I would say it is worth consulting a local whole of market broker to see what they could organise for you.

stolt

Fairdo wrote: »

You also haven't mentioned if your wife earns an income. If it doesn't then it may be worth putting those tax credits in your wifes name as income (as long as that particular lender accepts this as an income)

Some lenders will work on affordability models so I would say it is worth consulting a local whole of market broker to see what they could organise for you.

No my wife doesn't earn anything other than the credits she gets, didnt think of using that as her income though. She won't return to work for another four years until our youngest is old enough to go to full time school.

Can i ask where I go abouts trying to find a whole market broker.
Can i also ask i get a littl econfused with all the fees involved, do you get the arrangement fee whether you use a broker or not?

herbiesjp

The credits can indeed be used as another source of income.

However not all lenders accpet all credits/benefits and they use varying amounts of them to put towards your income i.e. some will use 100% of their value, whilst others may use 60%

The arrangement fee is not levied by the broker, but instead by the bank. So even if you went direct to the bank for the same identical deal you would have to pay the arrangement fee.

However finding a cost effective deal i.e. good rate and good fees is where a good adviser really helps out, as a lot of people get taken in by great headline rates without looking inot the effect the fees make on the deal

Can friends or family help with a recommendation?

stolt

thanks, i'll ask around, i don't know anyone that has moved recently. I'll have a look at the best buy tables and go from there. manyt hansk for all your answers.