Affordability worries!!!!!

amnblog

of course you'll have to prove standard terms before mortgage offer - so that know they don't need to add a rating into the affordability

getzls

They asked me how much I spend on petrol, not just for work but overall.

I was speaking to Nationwide today and they say they don't look at P60's now but see 13 weeks pay slips.

Thought a bit odd as in my case i can show them my last 13 weeks averaging 48 hours but after the summer work it would average maybe 65 hours.

I work in Security so there is more work covering holidays then.

So 13 weeks does not always give a true reading.
Wonder why they now discount your earnings over the year.

Thrugelmir

Leon_W wrote: »

It's a bit of a nonsense really.

Unfortunately many people need nannying these days. People used to want to borrow less not more. Wage inflation may not come to the rescue of the heavily indebted as it did in previous decades.

kingstreet

FWIW, Melton Mowbray calculator asks for number of drinkers and smokers in the household.

dimbo61

Cupcake with only 5% deposit and help to buy loan you will be looking at 4.99/5.49% interest rate NOW before rates go up.
Consider a long term fix if taking that sort of debt on ( if you can get a mortgage that size)
You also need to consider repaying the HTB loan in five years

kingstreet

dimbo61 wrote: »

Cupcake with only 5% deposit and help to buy loan you will be looking at 4.99/5.49% interest rate NOW before rates go up

Nah. Even a five year fix on HTB - EL is typically under 4%, with lower rates for shorter fixes.

For example, I did a three year fix with Nationwide yesterday on HTB - EL at 75% and the rate is 3.24%.

HTB - MG rates are around 5% - 5.5%.

getmore4less

cupcake2014 wrote: »

I have also been told that the broker will ask you things like ''how much would you spend on haircuts/colouring per month?!'' It just seems crazy as a lot of it you cant even put a cost against??

You need to learn about budgeting and planning your spends, you can cost everything if you plan properly.


If you can't budget the simple stuff a house and mortgage might be taking on too much.


You need to work out what you can afford, not what someone will lend you.



The debtfreewanabee board has loads of info on budgeting and setting goals.


start with SOA and build up to a 5 and 10 year plan.
http://www.stoozing.com/calculator/soa.php


use the last 12 months as a guide to the NOW spending.
then do a SOA as if you had bought a house.

caprikid1

At the end of the day repossessions and irresponsible lending is good for no one. Horiffic for those being reposessed and soul destroying for those who see prices spiraling away from the fueled by reckless lending.

consequently mortgage companies are looking a lot more closely at expenditure.

A 3yr car loan / Lease will not just expire when you get a mortgage.

A commute costing £300 a month won't just stop , nor will expensive childcare.

Reality is prior to low rates / Reckless lending on income multiples for a couple 2.5x was the norm and considered sensible, many still got repossesesd.

Look at your bank statements and fully anaylse what you are spending. It is not difficult, use minimal cash and download statements to excel. Keep a book and record your cash transactions.

Speed to others with similar homes and find what they spend on council Tax, Electric , Gas etc.

Its great to buy your first house but it should be the start of a new beginning not the end of it.

northeastcanuck

getmore4less wrote: »

You need to learn about budgeting and planning your spends, you can cost everything if you plan properly.


If you can't budget the simple stuff a house and mortgage might be taking on too much

Long time lurker here, finally decided to post because sanctimonious comments such as the above are driving me crazy.

I suppose it's not too surprising considering the nature of the website, but I sometimes think that people don't understand that everyone is not like them. Everyone's financial situation is different, and the path that they have taken through life to get there varies enormously. Is it really so surprising that someone doesn't know how much their family spends on haircuts? Not at all. Take my family for example. For myself, it's easy - £5 a month at the barber around the corner. But, as I have three females in my household who have very complicated treatments/cuts/styles on a non-regular basis paid for with a variety of cash/credit/debit (depending on what is in the handbag at the time), I couldn't tell you how much they spent if my life depended on it. I have more important things to spend my time on, like going out to work making money.

These new affordability rules are over-the-top and although they might be sensible, they will have unintended consequences. To start, most people are still not aware that things have changed and will only begin to realise the implications when they go to remortgage or move house. The whole system has been turned on its' head and what was normal and acceptable before may now cause complete rejection. Stoozing on zero-percent credit cards (promoted by this website) - forget it! Making use of your agreed overdraft because it's cheap money - black mark. Private school fees? No chance! HP cars? No way! Basically, everything the 'squeezed middle' does is now the enemy as far as MMR is concerned. The worst one of all though is the fact that contributing to a pension counts against you - forget that you are saving for your retirement and hopefully not be reliant on the state - this will encourage even more people not to save for old age. Appalling.

The problem is that the price level of the current housing market was a result of the old system. If the post-MMR rules had been in place all along prices wouldn't be where they are now. Implementing such a system now (far too late) will result in nothing but endless problems for otherwise credit-worthy people. Square peg, round hole.

In my experience, having owned several homes over the years, is that the mortgage isn't the problem, and in general over time it helps with financial stability in a constantly changing world and household circumstances. Just because someone doesn't know in absolute detail how much they spend on what, it does NOT mean that they cannot handle a mortgage.

caprikid1

House prices are yet to reflect new mortgage criteria so hopefully will come in the reach of many.

"The worst one of all though is the fact that contributing to a pension counts against you - forget that you are saving for your retirement and hopefully not be reliant on the state - this will encourage even more people not to save for old age. Appalling."

No its not appalling its sensibile analysis of what people earn and spend.

If I had both my Children in private school and combined with large pension contributions I could not afford a lottery ticket and certainly not a mortgage.

People make choices (Yes they are choices), those choice affect what they can AFFORD to borrow.

Now just apply it to BTL and lets get a sensible market.