Multipliers or Affordability?

henrik1971

We're looking to sell our house shortly, and then rent for a bit whilst we look around for something bigger/better.
Been on various "how much can i borrow" calculators on the internet and they all seem to give wildly different estimates/ranges of what we might be able to borrow. Based on income 1 at £40,000, and income 2 at £15,000 we got figures of between 115,000 and 270,000-odd.
I noticed our current lender - Halifax, seems relatively tight-fisted and if you have any other borrowings - even just £100 per month commitment, it massively knocks how much you can borrow.

What can i realistically expect to be able to borrow, based on a LTV of around 80-85%, no other borrowings and an immaculate credit history?
I'm assuming here a mainstream lender at a rate of interest that won't make my eyes water!!

henrik1971

bump......

R_P_W

I think if you work on the basis of between 3-4 times your income (depending on the lender) you won't be too far off the mark.

Obviously if you have any CC, loans, car finance, student loan then that will be taken into accoint in some way.

Jimbo1976

The problem with the mortgage calculators is that they are pretty blunt tools. When a lender is working out how much it will lend you one of the main parts of this will be how well you do in its credit score (unhelpfully this is not the same as your experian etc credit score). This calculation takes into account a lot of the information that goes on your application form and other information it gets from the credit bureaus.

There will be other things which will affect the amount you can borrow, outgoing (as RPW has explained above all lenders will do this), number of dependents, deposit (you will find you can probably borrow more with a 20% deposit than with a 15% deposit)

I would speak to a broker as they are much wiser and more experienced and will be able to guide you to lenders who are prepared to lend more.