How much can we borrow?

adamdaddum

Hello everyone at the MSE forums, long time lurker, 1st time poster!

I'm considering buying a house with my sister. We plan to buy a property with enough room for the both of us and a lodger (maybe two lodgers).

About me:
I'm currently a home owner and have round 10k in equity. (bought 4 yrs ago)
I have no debts/loans/credit cards etc.
Experian credit score of 999
Consistantly overpay my mortgage by £500 a month (£1200/month total)
Currently earn £24000 however recently become the director of the family business with scope for potential pay rises in future.


Sister:
Same employment 4 years
Experian credit score of 999
10k deposit
21k salery + company car

Ive seen various 'calculators' that tell me we can borrow anything from £120-225,000.

Any idea what we can realisticly expect to borrow?

Thanks in advance, Adam

Eellogofusciouhipoppokunu

Go and see a mortgage broker who will let you know immediately what products are available and how much you can borrow.

Jimbo1976

To be honest, it is impossible to tell. Most lenders now have moved away from income multiples to "affordability models" where they look at your income and outgoings and come up with an amount of disposable income which you could use to support a mortgage. Personally I would be surprised if you could borrow £225,000 as thats 5 times your joint income! I would say, somewhere in the middle.

Are you selling your house? If so you will have about £20k for your new one, though don't forget to take estate agency fees into account.

handytips

some lenders are better than others when it comes to affordability and the term of the mortgage will help on affordability, eg if you take a 30 year term then most will lend a little extra. A broker will be able to tell you straight away maximum borrowing, to ascertain the amount of borrowing you would need to be credit scored by the chosen lender. I know which lender i would choose for you.