Agreement in principle much different to what they're willing to lend

Firepanda

Hi,

I enquired with Santander on two separate occasions within the last 1.5 months about getting a mortgage agreement in principle. First time was for 4.5x my salary and then for 5x my salary (I asked twice as you give them a figure and they either say yes or no, couldn't ask for the highest amount they'd be willing to lend). Both times they gave me the agreement with just a phone call.

I put down an offer for a house a few weeks ago which was accepted. I rang up recently asking if I could get the ball rolling with the mortgage and now suddenly they are only prepared to lend me 4x my salary.

The mortgage I need is 4.58x my salary.

Is this normal for them to do this? It seems ridiculous that it would go down so much and I've lost confidence in the whole process.

Does anyone know where I might be able to get a mortgage for that amount, and had success with them?

Dave_Ham

Why so desperate to use Santander?

It could be due to credit scoring, existing unsecured commitments, type of income used, dependents, inexperience of person picking up the phone or any number of other variables.

Have a chat with a broker, or do a fair amount of research. There are a few lenders that will go five times still.

All the best

Thrugelmir

Much depends on your personal circumstances and the property you are intending to purchase.

ACG

How did the phone call go?

Was it just would you lend me 5x my income?
Yes.

Or did they take your details (income/expenditure/credit commitments etc)?

Firepanda

ACG wrote: »

How did the phone call go?

Was it just would you lend me 5x my income?
Yes.

Or did they take your details (income/expenditure/credit commitments etc)?

I spoke to what felt like their Glasgow mortgage department for the agreements, then to someone who worked in Bradford. I'm not sure but it may be the case that the one in Bradford was just taking the call due to a high volume at that time and wasn't really part of the mortgage team, after all it seemed to me like she just consulted their website rather than actually calculating what I could afford.

As to how the call went, it was a full overview of my circumstances in every case.

To the other guys, I'm single with no loan (except student), no dependants, and I asked for a 35 year mortgage (I'm 25 so that should be no probs)

I wanted Santander for the 123 account bonus, plus I thought I'd have an easier time with them since I do all my banking there!

Thrugelmir

Firepanda wrote: »

and I asked for a 35 year mortgage

Coupled with a high multiple you would be stretching affordability. As would have little capacity to absorb higher interest rates.

Firepanda

Thrugelmir wrote: »

Coupled with a high multiple you would be stretching affordability. As would have little capacity to absorb higher interest rates.

Really? Does asking for a 35 year hurt me? I thought it would go in my favour as the monthly cost would go down. I don't plan on taking 35 years to pay it off, but just thought it would help initially.

If I were to ask for 25 would it benefit my application?

Dave_Ham

Not true, the longer the term the more chance of eeking out a little extra on the income multiples.

Likely to be a solution, but not Santander by the sounds of it

amnblog

if Santander wont lend you what you need you have to look elsewhere or you are banging on a closed door.

(Incidentally there are probably a dozen or more factors that will affect the maximum affordability calculation generated by Santander).

Thrugelmir

Firepanda wrote: »

If I were to ask for 25 would it benefit my application?

Is it affordable though? If interest rates were to rise to say 6%.