Before we apply - advice

Needanewhouse

ManicRower wrote: »

Please do not take this as me being rude, but if I were a lender I'd see:


Debt at approx 30k/65% of total household income (which you say is decreasing so well done for that) ran up whilst having a mortgage of £70k. You now want to basically double your mortgage.


Sky/Gym contracts which suggest (to me at least) you are not particularly worried by the level of debt or seriously trying to increase your level of savings.


A 5% deposit, therefore tighter underwriting criteria with regards to debt/credit, a limited 'pot' of money to lend and (probably) a lot of people wanting said money who represent a lower risk than yourself to lend to.


Do you have additional money to cover stamp duty/legal fees etc? If not, these costs will also eat into your deposit.


I'm not an expert but I think you may struggle at 5%.

Thanks for being honest.

Yes, we have the stamp, legal fees etc to the side. The 5% deposit in our flat equity from its 2009 value, i suspect that the value has increased, so this should be more than 5%.

We arent worried by the level of debt, 30k (more like 26k now) seems like a lot, however we are comfortable with the monthly payments and know that in 4.5 years time this will be £0. Previously this was on much lower wages, which is why it got to where it was, so i feel ALOT better about it now.

Do you think it may be sensible to overpay the loan for 1 year before applying? Shows financial responsibility?

Its just i have seen on previous posts that the loan value isnt really considered, the monthly payment amount is the key issue.

Thanks again

tvfreek

The higher the loan to value, the higher the assessment for affordability.

However, if after you've taken the new mortgage into consideration you have circa £1k left a month, the mortgage is probably affordable.

And thats without me knowing the actual amount you're borrowing but its a guide based on the net income you stated previously.