5.5 high multiple

servalan

I earn £27689 a year . This goes upto £28633 beginning of april. I am looking for a mortgage of 5 and half times my salary . I have 3 loans egg £3771 end 01/10/09 cahoot £4661 end 01/10/09 A&L £8500 end 01/04/2011. Could anyone please advice. I do have enough in my saving to pay the egg one off if this helps. I currently have a mortgage for £70000. but looking to move to a bigger house .

Thanks

MortgageMamma

When you say 5.5 times your income, have you deducted your monthly credit commitments for these loans off that?

servalan

no i haven't

herbiesjp

The those will reduce the amount of your income a lender will be able to utilise when calculating a mortgage amount

YOu need to annualise your monthly loan payments i.e if they were £600 pm you would do 12* £600 = £7200

You would then deduct £7200 from your income and then look at income multiples.

Ii looks like you are looking for over the 5.5 times income currently when taking those into account

HTH

maninthestreet

You already have unsecured debt totalling £16932 - this represents 59% of your annual salary from April onwards, plus you have a mortage of £70,000. You are now proposing to borrow an addtional £87,000 pounds of secured borrowing, to give a total of £157,000 for the mortgage. This represents a monthly payment of £940, assuming a 25 year repayment mortage @ 5.25% interest rate. What are you going to live on once you have paid the mortgage and the unsecured loan repayments?

MortgageMamma

He could consider consolidating those loans in a 125% mortgage, they are not for everyone, but if the move is essential it might be the only option

servalan

hi

Thanks guys. Here is some more info . Yeah the move is a must . I only have a one bed flat now and need somewhere bigger. like i said earlier i could pay the egg loan off now with my savings. would this make it more of a possibility. Been doing some calculations and the amount i'll need to borrow is £129950. Is this more realistic. The house i have my eye on is a new build. And i will make a min of £10000 on my current house . Estate agent coming up on thurs to value it. I had it valued 12 month ago when i changed motgage provider and it was valued then at £82000. so may have more for a deposit won't know until mine is valued and sells but would say £10000 min.

MortgageMamma

Servalan have you thought about a consolidation mrtgage for your loans? do you live alone? how old r u?

There is a mortgage you can take which is 95% mortgage and 30% UNSECURED LOAN - this may be an option for you as you get the loan at the same rate as the mortgage, over the same term of the mortgage so it will minimise your payments - only thing is, it would mean you would pay more interest in the long term...but if its a case of putting things right now, and you not spending on credit any further, it could be a good option

servalan

thanks mortgage mamma . Who provides that type of mortgage with 95 % then additional borrowing. will have a google later but if you can roughly point me in the dirrection as never heard of these type of mortgages. Yes i am single and 29 . No more credit is needed after this. learnt my lessons with money now looking to settle down and apart from what i have now everything is got by saving up and half the time by the time i have the money i don't want it. Always best to sleep on things

Angie

millsy1980

Hi Sevalan,

MortgageMamma makes a good point if there is a need to consolidate those loans. Northern Rock were the first lender I believe to do this type of lending so that is a good starting point, but I do think there are other lenders entering this market, so check with a whole of market broker for more choice.

servalan

Hi again

Thanks for your advice
I have just been onto Northern rock and got an agreement in principle for their toether plan. I just wanted to ask that when i went through the application i put the loans amount in and ticked that they would be repaid with the new mortgage was i right to do this. I put the full amount i require down for initial draw down when it happens as this will clear the loans .The unsecure is a bit lower than i need but can use my savings to pay the difference. How set in stone is an agreement in principle has it past credit scoring etc. Also am i better to start the full application now or do i need to wait till my house sells etc .

Thank you all for your advice.