FTB LTV ratio

monkeysrevenge

Hi all,

Me and my partner have been initially quoted by a broker for a 90% LTV mortgage (not yet got an AIP), however we've realised that on a 100k house mortgage we can probably now afford 15% deposit rather than just 10%.

In terms of acceptability and rates, is there a big difference between 90% and 85% LTV? I am on a salary of 21K, partner's income disallowed as it's seasonal work.

One potential restriction is that I'm only 4 months into a new job (3 months probabtionary complete) however I've been in continuous employment for 8 years in the same career.

If necessary we can put 15% down, though we'd liked to have kept a bit aside for updating the house but it's perfectly liveable in at the moment.

What do you reckon in terms of being accepted, and the difference in rates?

amnblog

Big difference on both rates and potential success.

Plus your income looks modest for 90% lending.

Put down 15% if you can.

ACG

You dont say what your partner earns, presuming its £10k plus affordability shouldnt be a problem.

Rate wise you open yourself up to lower rates hitting 85%, you also have more chance of being accepted.

Some lenders will come back on the credit search and say they wont accept you at 90% but they will accept you at xx% in which case the decision has been made for you.

Make sure you check with the lender that you meet the employment threshold, some say 6 months in current position although you should be fine with the majority of lenders.

monkeysrevenge

We've been told my partner's income would be disallowed from most/all applications because the seasonal work consists of seperate fixed term contracts over 3/6 months at a time - no permanant contract - so affordability would be based solely on my salary.

ACG

Before you submit any application (to save wasted credit checks), check the affordability calculators as this could be tight with your income alone - especially if you put down 1 dependent (your partner).

But you also need to check your employment with the lender.

I dont doubt based on what you have said you can get a mortgage but it might not be for every lender. Try and talk it through with the lenders before you submit anything if possible or maybe speak to a broker.

monkeysrevenge

Brill - thanks for your comments.

One more thing which I've been wondering, I had a CC debt which was at 0% and had savings on top of deposit to pay this off (simply to earn interest without paying it), however I've now paid this off in full as of yesterday.

It still appears on my Equifax report as an outstanding balance, and probably won't update for another 3 weeks if it's done monthly (last time was 30th May).

If we put an application in stating I have £0 outstanding on cards (which is true) and a balance appears during a credit check, is this going to go against us? We've found a house we like and want to make an offer, but it's a bargain and worry that it's going to go if we wait to apply for an AIP...

Thanks again

kingstreet

Put the previous balance in and tick the "to be repaid on or before completion" box. Do not leave it off, or the system may think you are trying to avoid disclosing it.

monkeysrevenge

Is it likely that they would still take this "debt" into consideration when making a decision on an AIP and then full application? i.e. if our affordability is borderline, would they include or exclude this figure as it may be the deciding factor?

Sorry if these questions seem a bit "how long is a peice of string" - just don't want to leave as little to chance as possible...

Thanks!

kingstreet

Santander might. No other lender does that.

monkeysrevenge

Thanks for your help so far. One more question...

I've been saving for a deposit for some time, however I've lent some of my funds to my mum when she was going through a bit of a sticky patch over the last 6-12 months.

She is now in a position to repay this money (approx £3k), and this would be transferred to my account as a lump sum in the next few weeks. I don't want lenders to think this is a "gift", because it's actually a repayment. Would this be OK as long as I can prove transactions in and out of my account?

kingstreet

It should be fine.