Want to move house - am trying to understand mortgages, equity etc!

PrincessJR

Hi,

We have been in our home for 5 years and as our family grows we are getting desperate to move. Our current property is worth roughly £170 and we are very lucky as my husbands parents want to buy from us as they are downsizing (however they need to sell theirs first!).

Assuming we are able to sell to my in laws, we will get £170k. Our mortgage balance is £140k, does that mean we will have £30k deposit for the next mortgage?
We also have £5k in savings so could we say we have £35k deposit?

Stupid question I know but someone told me its not as simple as that?

Also, when looking into how much we can borrow for the next house, I'm not sure what I should enter as salary for myself. My full time salary is £29k but when I go back to work (on maternity currently) I will go part time so my salary will be £29k pro rata. Do I just put £29k or do I need to pro rata it and put that amount as my salary?

These may seem really basic questions, but Im really unsure! Have used some mortgage calculators to give me a VERY rough idea of how much we could borrow jointly (£27k + £29k) but they range from £158k - £280k??!!!
I know they are only to give an illustration but I dont see how banks can vary so much so I would like to understand it all a bit better myself.

Any advice appreciated

Thank you

kingstreet

The equity you have i your current property, plus any savings will be the money to pay your next deposit and any fees on your purchase.

If you are going back to work part-time, use the income you will have doing that part-time work in affordability calculators, not what you used to get paid when you worked full-time.

Caz3121

you will use your pro rata'd salary - so if your salary is £29k full time and you go back part time 50% you would use £14.5k as your salary

PrincessJR

kingstreet wrote: »

The equity you have i your current property, plus any savings will be the money to pay your next deposit and any fees on your purchase.

If you are going back to work part-time, use the income you will have doing that part-time work in affordability calculators, not what you used to get paid when you worked full-time.

Thanks for your reply. My Manager at work has suggested that if I do go back part time, to up my hours temporarily while I put in a mortgage application, then once we have the mortgage and have bought our house etc, drop y hours back to part time? She said that providing we know we can meet the monthly payments its not a problem?? She did it apparently, but surely its a con? I dont want to get in trouble but do see what she means.
Is it something people do?

kingstreet

It's deception and should therefore not take place.

If you need three months' payslips to evidence the income, you're going to have to work full time for a good while to make the deception work, too.

PrincessJR

Thats what I thought. Shes a sly one, did the same just before announcing she was pregnant, and worked full time until her maternity leave to get full time maternity pay, when she usually only works part time.

I think Id rather just see how much we can borrow on my pro rata salary!
Thank you.

Suarez

A simple way is your ACTUAL salary plus partner ACTUAL salary x 4 = mortgage amount + deposit = maximum house price.

You may be able to stretch a little more or may get a little less depending on credit histories.