Income / Mortgage Ratios

kingstreet

Are you a contractor with a contract/daily rate?

If so, there are lenders which will use this rate to calculate your income, rather than SA302s or accounts.

shortchanged_2

Question is, why would you want to burden yourself with such a level of debt?

That level of mortgage would be like a chain around your neck and you will forever be worrying about interest rate rises unless of course you get a mega long term fix, which would of course be at a premium anyway.

amnblog

Three steps Dezzy

1. Ignore your friends claims, 4 times income is a reasonable ball park
2. Get your trading accounts together for 3 years and order your SA302s from HMRC for the last three tax years.
3. Engage a competent mortgage broker.

Mortgage_Mark_2

Your friend, I suspect, has either not been wholy accurate with the truth on his application, or his broker has put it through as a BTL or something.

You will not get a residential mortgage at 7+ times your income. No chance.

Thrugelmir

dezzy1 wrote: »

Fair enough :cool:

But the way I'm looking at it is it's not a "stupid" amount I'm looking to borrow (or my friend has). It's just a riskier amount than at 4.5 times but income would more than cover the current payments, living expenses etc.

Do the maths.

£350k Mortgage = £43,750 Annual Salary

Outgoing Per Month @ 4% 25 Year Term Repayment Mortgage = £1.847

Monthly Take Home Pay £2,708

Equates to 68% of take home salary.

Affordable borrowing?

ACG

The thing is, nobody knows his circumstances. Im pretty sure I could get my bills in under £800 a month... I do now.

But he could be wanting to buy the house in his sole name but his partner live there also. He could have been with his partner 15 years and have a pretty good idea that everything will remain rosy.

Im not saying I would put through a mortgage at 6,7 or 8 times income but using second charges it could be done although thats a little difficult being a first time buyer.

Paully232000

The figures you are talking about, forgetting about lending criteria, mortgage company rules, just sound plain daft in my opinion. 8x income.
We have a mortgage that is just short of 2.6x our income and that is manageable. To be far we did have a large deposit which cushioned the affordability. i would just worry about it all seeming a good idea now, but when the reality of how much money you have left after mortgage, bills etc come out of your account that reality may be hard to swallow.
I like to have a bit extra to spend on luxuries each month without worrying if the bills will be paid, interest rates going up etc etc

JustinR1979

ACG wrote: »

The thing is, nobody knows his circumstances. Im pretty sure I could get my bills in under £800 a month... I do now.

I did it for 3 years, and paid parents back £14k in that time too.
As do-able as it is, to lend knowing this would be crazy.
I wouldn't like to take this on now with the way interest rates will undoubtedly be going soon