some advice on mortgage 5x my salary

stolt

spent most of my time on the selling and house forum, as i've now sold our house i need to start thinking about a mortgage for the new one.

heres the details

selling house for 291,500k which we owe 66k on.
buying new house for 400k (will hopefully negotiate down to 395k:money:)

we have about 35k in savings that will be used for fees/stamp duty etc.

I worked it out that we will need a mortgage of 169,500k on the new house. I will try to get this over 30 years.

I earn 35,500 a year plus 3,000 bonus each year (not gauranteed but for the last 7 years i've got this figure)


I've have a FA looking into the figures for me and he said he will ring me tomorrow with some figures.


a couple of questions if i may....
is this sort of lending common (ie 5times salary)
i'm still unsure whether to go for capped, 5 yr fixed, or 10yr fixed.


finances are tight and my missus gets child tax credit but no other income, and will be returning to work in 5 years time, so we want a five years min.


thanks for taking the time to read through this post.

herbiesjp

With that kind of deposit a lot of lenders will look to agree that for you.

Capped or fixed will depend a lot on where the cap is, and how it is calculated.

If you need certainty for 5 years, then fixed would be the answer. At 5 times borrowing I would suggest fixing is a good idea, which then ties in nicely for when your wife goes back to work - especially as you say finances are tight

HTH

stolt

herbiesjp wrote: »

With that kind of deposit a lot of lenders will look to agree that for you.

Capped or fixed will depend a lot on where the cap is, and how it is calculated.

If you need certainty for 5 years, then fixed would be the answer. At 5 times borrowing I would suggest fixing is a good idea, which then ties in nicely for when your wife goes back to work - especially as you say finances are tight

HTH

hi thanks for replying so quickly, thats good news about the most lenders agreeing to it, I thought it would be a lot harder and was concerned about being only able to get a mortgage with a lender that charges really high interest rates.

I;m assuming there are some lenders that won't go as high as 5 times salary are there any that certainly do and i;ll have a look on the net to see what offers they have.

the cheapest i can find just now is

Nationwide BS 5.68% Fixed Fixed £1,010.59 5.68% (6.7%) Alliance & Leicester 5.79% Fixed Fixed £1,022.77 5.79% (7.2%)

JoeK_3

Try http://www.moneysupermarket.com for a comparison site.

JoeK

stolt

JoeK wrote: »

Try http://www.moneysupermarket.com for a comparison site.

JoeK

thanks also notice that martin recommends london and county so doing a search on there.

also forgot to add that we want the mortage over 30 years, is that a problem with any lenders, i'm sure they won't mind , at the end of the day it is more interest for them.

i think now i'm leaning more towards a 10 yr fixed rather than a 5, just to give me a bit of a breathing space.

Jockthearab

Sorry to be a nosy so & so Stolt, but I was just wondering if this was the house that you fell in love with way back in January?! Personally, I wouldn't be comfortable with a 5 x salary mortgage but I understand your reasons why you sold your house so I wish you good luck! If I were you, I would go the 10 yr fixed if it's available, as at least you won't have to worry about interest rate rises or looking around for another deal in a few years time.

Again,hope all goes well

JtA

stolt

Jockthearab wrote: »

Sorry to be a nosy so & so Stolt, but I was just wondering if this was the house that you fell in love with way back in January?! Personally, I wouldn't be comfortable with a 5 x salary mortgage but I understand your reasons why you sold your house so I wish you good luck! If I were you, I would go the 10 yr fixed if it's available, as at least you won't have to worry about interest rate rises or looking around for another deal in a few years time.

Again,hope all goes well

JtA

hi there, no we lost that house due to us having not sold ours, strangely enough i dropped some leaflets through neighbouring houses and one of them phoned and wants a private sale, this house is two doors down but better and i haven't got to go through any EA's.

thanks for the advice about the 10yr deals, I';m leaning towards them myself, it will be a struggle but I;m sure were manage, i do a bit of ebaying aswell so I will have some additional money each month but it won't be gauranteed obviously. and we will have a bit of savings to add to the interior of the house but each month it will be tight but i'm convinced that when you want something so much you should go for it, we haven't got any other debts and were not likely too either. fingers crossed

stolt

hi i had some details sent back from the FA, and although the capped rate looks good, I just assumed that thre FA would be able to get better deals. I spoke to another adviser and have sent an email to another for their deals to see how they differ.


theres a capped 5 yr deal capped at 5.95% over 30 years with
booking fee 495.00
valuation fee 340.00
admin charge 90.00
transfer fee 30.00
final repayment fee 295.00
legal fees 117.00

cheltenham and gloucester 5 yr fixed 4.98%
arrangement fee of 4362.00
valuation fee 525.00
telegraphic transfer 30.00
repayment fee 225.00
legal fees 117.00


abbey national 5 yr capped 5.95% over 25 years
with the following costs
booking fee 499.00
valuation fee 340.00
admin fee 90.00
telegraphic transfer 30.00
sealing fee 225.00
legal fees 117.50.



a couple of questions he said he based it on the lenders he considered would lend upto the the nearly 5x salary i need.

do all lenders charge the same for the legal fees (payable to your conveyancer for acting on behalf of the lender).


can any FA on here advise with the likes of alliance and leicester, northen rock, norwich and peterborough do they have a standard lending criteria or are they more reservd it what they lend compared to salaries.

thankyou

herbiesjp

Without knwoing your details, it would be difficult for anyone to come back to you and say which of those deasl is best or best suited to your needs.

There may well be other lenders that could offer the same mortgage amounts, but again the adviser you have spoken to already will be armed with all the necessary information

Are you speaking to 3 advisers?

stolt

Well I have one adviser that i'm dealing with and has put in a lot of work and ideally would love to go with him because he has been doing alot of searching around. I also got in touch with london and county and they are going to advise this afternoon, but said with three dependants and that size of loan there won't be too many banks out there wanting to touch me although have not other laons, or bad credit it seems the banks aren't interested in me.

I was also speaking to a adviser back in january when we had the original house we liked, obviously deals have changed quite a bit since then and i emailed her back to ask her what she could find for me now.

stolt

well after much thought i cant seem to find a better deal or not with a lender than is willing to lend 4.7 times my salary, I don't want to take the risk and apply to several banks because this will show on my credit record so the adviser said that abbey are quite good for high multiples.
its this deal i'm going for

theres a capped 5 yr deal capped at 5.95% over 30 years with
booking fee 495.00
valuation fee 340.00
admin charge 90.00
transfer fee 30.00
final repayment fee 295.00
legal fees 117.00

one question ,the e key facts mention that because its a capped rate therate could go down and payments could be less, does that mean that my payments will go down in line with the BOE base rate or abbeys SVR? standard varible rate.