Massive change in mortgage

kingstreet

TrixA wrote: »

Am I right in thinking you had an actual mortgage offer at £136k (as opposed to an offer in principle)? If so, have you explored whether you could simply transfer the offer to the new property? We're in this situation and our lender (HSBC) seemed confident we could do that without having to go through the new affordability testing rules.

Change of property requires an MMR conversion on Halifax cases.

squirrelcheeks

TrixA wrote: »

Am I right in thinking you had an actual mortgage offer at £136k (as opposed to an offer in principle)? If so, have you explored whether you could simply transfer the offer to the new property? We're in this situation and our lender (HSBC) seemed confident we could do that without having to go through the new affordability testing rules.

Yes I had an offer in place ready to move in (not just an agreement, everything had been signed and formalised in a full application), however as the rules have changed since then any changes to the offer mean that I effectively just apply for a brand new mortgage under the new rules. So unfortunately it cannot be transferred.

Brock_and_Roll

The OP also needs to bear in mind (albeit it will not help in the short term) that if enough banks apply these new rules the eventual effect may well be to take the froth off house prices. If enough people on normal wages with good deposits and with normal lifestyles cannot afford "normal" houses then sellers will have to mark down their prices.

In the long run that will be good for everyone.

StuC75

Not sure its about being able to afford 'normal houses' as its a case of someone buying with a Single income stretching to buy something slightly outside of the regular earnings multiples.

Brock_and_Roll wrote: »

The OP also needs to bear in mind (albeit it will not help in the short term) that if enough banks apply these new rules the eventual effect may well be to take the froth off house prices. If enough people on normal wages with good deposits and with normal lifestyles cannot afford "normal" houses then sellers will have to mark down their prices.

In the long run that will be good for everyone.

squirrelcheeks

StuC75 wrote: »

Not sure its about being able to afford 'normal houses' as its a case of someone buying with a Single income stretching to buy something slightly outside of the regular earnings multiples.

I guess so, however I am only buying a (small) two bedroom house. I don't think that's really something that is unusual for my age and salary. I'm 30 and moved out of home at 18, rented and saved and then bought a first place at 23/24, sold and made a good profit, so to be honest I kind of feel a small two bedroomed house in a slightly undesirable area should really be do-able.

I do understand the multiples. However if I were to buy the same property without any service charges attached (so if I bought a slightly roomier ex-council house in the surrounding area with no service charge) then I'd be loaned 145k (my mortgage advisor has confirmed this to me). So it appears to be all about the £45/month. They're willing to lend me an extra £20k but consider the £45/month as too big a risk. To me this doesn't make sense based on my outgoings and salary left over each month. On that basis they shouldn't be loaning me an extra £20k either.

I don't know, it just doesn't seem to make sense to me. It's probably just because of the huge difference in the situation now versus earlier this year, or at any other point when I was looking at mortgages. It is obviously bad timing on my part in that sense. I am just frustrated that I don't feel like I'm getting anywhere. I could go out and buy a tiny one-bed flat providing the service charges are very low, but I would just be so unhappy there. At the same time I don't want to waste all my money on rent.

Whinge over!

tlc678910

Your situation sounds very frustrating.

It sounds like recently you have been able to save about £1K each month. Is there any chance you could stay in your current living arrangement for a year and add another 12K to your deposit. Perhaps you are with family? Failing that what about renting a room rather than place of your own so you can save £500 a month.

You are very close to getting the finance for the property you want - one year of sacrifice might mean you can afford it - although I understand there may be some risk of house prices rising.

Good luck

ReformedShopper

Like others have pointed out, other lenders may lend you more money, try Barclays for example, although the process may take a bit longer. You can also ask for an extended term, say 30 years instead of the average 25 year term. Your broker, if he's any good, should really be discussing these options with you!

MMR Rules are definitely a pain in the rear end, but if you are truly desperate to get on the property ladder, you explore all possible avenues, than give up at the first hurdle

Fingers crossed for you!