Have new MMR 'affordability' checks destroyed by chances?

Thrugelmir

tigsly wrote: »

we were offered something like 7x our joint salaries..

Sheer madness and the reason certain lenders went to the wall..........

seriouslyworried

Thanks all,

I guess if the current deal doesn't go through I'll have to reassess my situation and start looking for 1 bed's in less desirable/rougher areas, which should still be possible given the deposit I've got.

Southend - point taken re the maths, although if neither of 2 low pay applicants can cover the mortgage individually I still really don't understand the willingness to lend nearly X 3 the single person. Surely they're just as screwed as the single person with a mortgage they can't pay if one loses a job?

I've always been given the impression £75,000 was a sizeable deposit for one person to save, so if I'm going to struggle to find a one bed flat now and prices keep rising, not sure what options are going to be left for single people in the future?

On the positive, if I do find somewhere I guess I'll be able to save a hell of a lot more than I could with a £250k mortgage.

moneydriveseverything

I have just been turned down because of MMR as well.

Self employed, several businesses but wanted to borrow £40k against one income stream that I was fairly confident was strong. 5 years of accounts showing that I was getting £10.5k per year PAYE, no debts, no cards oustanding and I had £200K deposit on a £240k house and they threw it out ! The crazy thing is that by buying I would be reducing my monthly outgoings by £500.

My wife is recently self employed so that wouldn't count either but I could have produced a guarantor.

I went via an experienced broker and he said that he was getting lots of rejections in the last 2 weeks which would have sailed through a month ago.

This will kill the housing market and just sustain the already expensive rental market.

D

Thrugelmir

Did you seriously apply on the basis of £10k of annual income? And not make a full disclosure.

shaniannie

Even though all our information is the same, same income, same dependants, no additional outgoings (no childcare, maintenance, school fees etc) so fundamentally the same info - nationwide's calculator would now lend us £0, when last week it said £108k. That just doesn't make sense.

Now I've got a huge feeling of dread and a very painful weekend of waiting to hear how our app with halifax (that was submitted on 11th April) is going to go.

I will never, ever put myself through this again, I'll stay in our current home even though it's too small for us!

julesds

Hi

I've just applied for mortgage with nationwide since MMR changes (14th), valuation has been booked for 23rd, so seems to be going okay. Went through broker who did seem concerned that changes would affect me.

I'm single applicant, no dependants, no travel costs (no car, walk to work) and fairly low outgoings. Requesting mortgage of £91,300 (house price - £133,000, 70 LTV. Equity will be from sale of flat, so not FTB, if they makes any difference.)

Reading this made we get the jitters that it would be rejected, so went onto their website and put in the information on the calculator. 1st time put it in came out as £0, more worried. However, put in again - did not change any info, however noticed that it failed to ask salary details, put this in and came out as will borrow me £140,000. So may not be the most accurate tool, best to speak to someone before loss all hope.

seriouslyworried

Julesds - I found the calculator very flaky as well, it through up a few zeros for me but eventually seemed to start working.

I would guess it was rushed out to meet the April deadline and is buggy as hell. Sadly I suspect when it did seem to work the results were broadly accurate.

This may not kill the market stone dead as some are predicting but it will be the end of single first time buyers being able to get on the ladder anywhere near London within a year if prices keep rising.

Suggest we all get very frugal very fast!

Fluffi

seriouslyworried wrote: »

Their online calculator reveals the 'Other outgoings' element is what's killing me. There are two criteria; "travel costs" and the real killer "any other costs you think we should know about".

I've enter £205 for travel, which is 100% accurate, and estimated £350 for the 'other' stuff, which from what I've read is anything from your internet bill to a haircut. This gives the £140,000 maximum.

Altering the 'other stuff' down to £175 (halving it) and all of a sudden they'll lend me £168,000!!

I would say put nothing for the "other stuff" - as the question implies its stuff that Nationwide can't work out for themselves - and they know you need to eat and have electricity at home.

If you make that zero I'm guess you'll probably be closer on just on the £175k you need? I hope so for your sake.

CKhalvashi

tigsly wrote: »

So when we applied for a mortgage 9 years ago - we were offered something like 7x our joint salaries..and now its abotu 3.5x.. so alot less even tho we earn more!

And that's the way IMO it should be.

Without taking interest into account, to be paying 28% of your salary on average, just on capital is going to be more of a stretch than 14% over a typical 25 year term.

Throw interest in, that's about 20%, instead of 40% of your salary gone at current rates (which are historically low). Double the rate on 7x, and you could be looking at well over half your salary gone, and that's still lower than rates have been in the past.

CK

michaels

Have you tried putting the term as long as you can up to statutory retirement age as this seems to help the calculator, obviously you can choose to pay more per month when you actually have the mortgage to give the term you want.