Looking for a mortgage, a lot of equity/deposit but struggling on affordability???

malmesbury_2

Hi everyone, I'm hoping to pick your helpful brains and see if you have any ideas
We currently have a 28k mortgage on a house worth £270k so approx £240k equity
We are looking at moving and spending £300-350k on a new home but we struggling to get a very good mortgage in principle as currently our income is relatively low as I am not working due to just having 2nd child and when I factor in childcare costs it just isn't viable, so our household income is £28k
We have had a mortgage for 10 years now never missed payment and have overpaid etc but our current provider would only lend £50k. This seems a bit daft to me because if they repossessed our new home they would be laughing as the mortgage would only be roughly a third of the value, I just assumed that because we had such a lot of equity it wouldn't be an issue.
Can anyone make any suggestions as to where to look or who May mortgage us whilst I am a sahm? Once the 2nd child recieves childcare funding at 3 I would be back to work on approx £25k.. I guess I'm hoping we can move now rather than wait a few years...

Any suggestions would be greatly appreciated

malmesbury_2

I should of added that we currently live well within our means and have excess funds each month to afford a mortgage increase but the computer at the bank "says no!"

betmunch

You cant use the tons of equity arguement any more lenders can only rely on that as the very last resort.

Having said that using only the bad points in your OP I think its pretty easy to place. What has your broker said about maximum borrowing

Thrugelmir

malmesbury wrote: »

I just assumed that because we had such a lot of equity it wouldn't be an issue.

Not how mortgage lending works. As repossession is an expensive business that the lender will not cover all of it's costs on. Therefore lenders lend on the basis of not having to repossess (or at least minimising the risk.

ACG

Your income can only support a mortgage of x amount. You could have £900k worth of equity but your income can still only support x.

You are not a million miles off so im sure with some fiddling around or finding a different lender you could probably get there or there abouts. Have you thought about extending the term? If you can overpay on the mortgage then your effectively playing the game to make it work?

marlasinger

I'm very surprised you could only borrow £50k on household income of £28k. There must be something else that is reducing your affordability.

When we got our mortgage several years ago (so pre MMR), we only had a household income of £25k and we borrowed about £95k. This was with Woolwich. Have you tried online affordability calculators? Putting your numbers in, you should be able to borrow about £110k (at 6.99% over 25 years, assuming monthly council tax of £130).

Thrugelmir

marlasinger wrote: »

When we got our mortgage several years ago (so pre MMR), we only had a household income of £25k and we borrowed about £95k.

Times have changed for good reason. An offer of £50k could be a polite way of saying we don't want your business. Lenders aren't selling cans of baked beans so it's not volume that they are interested in.