Interesting mortgage advice

kkqd1337

Had a bit of interesting mortgage advice recently

On a shared ownership property I was told by a large independent mortgage advice company that based on my £1,600 salary i can afford to pay £1,000/month for a property - thats just the mortgage, rent, service charge.

By my estimation once I pay council tax, bills, and i don't know... occasionally leave the house for work i'd have less than nothing left!

I was a bit surprised they took none of this into account... i can only afford max £800/month in my humble opinion, and then with bills etc on top i'd still feel a bit hard done by.

Are they wrong? or am i wrong?

monty-doggy

They are very wrong! I'd say around a third of your take home pay should be rent or mortgage this is the norm. Imagine how crippled you would be if the interest rate rose? That's really irresponsible advice!

kkqd1337

monty-doggy wrote: »

They are very wrong! I'd say around a third of your take home pay should be rent or mortgage this is the norm. Imagine how crippled you would be if the interest rate rose? That's really irresponsible advice!

haha yes - i picked him up on it on the phone straight away.

he did agree with me that it was excessive

but i did feel - i can't understand why - that he was still pushing me to pay that much.

bizarre

for me (in london) i think i could manage £800 but only because i know my pay will rise, but that first year will still be a little painful - so your third suggestion seems right to me

ACG

Im not sure that would get through the books with many lenders.

Was he actually advising you to do that or just saying that its possible? Also are there any bonuses that have not been taken into account in this post?

Thrugelmir

kkqd1337 wrote: »

Am they wrong? or am i wrong?

I would recommend seeking an alternative broker. If this is an idication as to the quality of their advice (or at least some of their advisors).

monty-doggy

Perhaps he is getting a commission relevant to the purchase price, so the more you borrow, the more he earns. Very very poor advice! I'd seek out a new broker!

kkqd1337

ACG wrote: »

Im not sure that would get through the books with many lenders.

Was he actually advising you to do that or just saying that its possible? Also are there any bonuses that have not been taken into account in this post?

never mind lenders, i'd be surprised if any borrower would allow a lender be approached with such a mad plan in their name!

my finances are fairly complicated at the moment, but i didn't tell them that, i simply said i earn just £1,600 post tax

i feel a little uncomfortable doing this, but it was someone from this 'company' mortgageadvicebureau.com

they actually look very good and professional from their site so i'm willing to write this off as a very early thoughts and ideas conversation to be fair. i'm not deep in negotiations or anything - but was surprised he even suggested such an idea

Sally22_2

Ive just been through all the Shared Ownership stuff and when you go for the interview with the Housing Association they want around 35 - 40% of your earnings to be going towards your rent/mortgage and service charge in total per month. (So this percentage doesnt include council tax/bills/shopping/existing credit agreements etc)

Ours actually came out at around 31% but we still got accepted, I think because we went for a resale property.

ACG

By lenders i mean the banks/building societies etc.