Mortgage Application Advice

bobobalde

Hi Everyone,

My wife and I are looking to move house, we have found the house we like (Taylor Wimpey New Build... :embarasse) and we are now at the reservation stage, but I wondered if anybody can give me some advice about the mortgage application.

We have between 30k and 37k equity in our current house depending on the sale value. Based on 30k we would need a Mortgage of 155k, I have had a look on a few mortgage comparison sites to get a benchmark, and the monthly payments would be easily within our means (only about £70 more than what we pay per month currently) - however I know that there is more to it when it comes to a Mortgage application.

Our current mortgage is with Nationwide, so I have had a look on their 'How much can I borrow' calculator, I've put in our monthly outgoings and it comes back saying no chance! I was a bit shocked by this because currently I put £300 into savings per month myself, and we save another £200 per month from the joint account so there is plenty of spare cash per month.

We have no loans, hire charges or credit card balances outstanding, but we do pay £400 out the bank per month in nursery fees (the rest is taken pre tax from my wife's wages via the nursery voucher scheme), so I am guessing that is having a major impact on the calculator.

Our eldest daughter starts school in September and this will reduce the amount out the bank by £200 per month, the house we want to buy isn't built until September, so I suppose the crux of my question is this, would the bank take that into consideration when we applied for the mortgage? Or am I better going through a Broker.

I know I could just as easily ask the bank, but I thought somebody on the forum might have had a similar experience.

Thanks.

kingstreet

Childcare cost will be treated as an expense until it ends.

They won't ignore it now, despite it ending/reducing in the future.

makeitstop

I'm not at all surprised that when people read stuff like this, that it whips up hysteria we see all too often about how mortgages are ridiculously difficult to obtain for some people.

How on earth can an online calculator come back with "no chance" answer to someone who is saving £500 a month, and yet still currently affords to run their home just fine.?

Why does it not come back with a lower figure than expected, rather than a "no chance".?

It makes no sense, unless of course the OP has input data to the calculator incorrectly.

Seems insane.

libf

Not sure about Taylor Wimpey but Barratt wouldn't let you reserve until you had an offer on your current property... Guessing if you don't have an exact sale figure that you're not at that stage yet?

bobobalde

makeitstop wrote: »

I'm not at all surprised that when people read stuff like this, that it whips up hysteria we see all too often about how mortgages are ridiculously difficult to obtain for some people.

How on earth can an online calculator come back with "no chance" answer to someone who is saving £500 a month, and yet still currently affords to run their home just fine.?

Why does it not come back with a lower figure than expected, rather than a "no chance".?

It makes no sense, unless of course the OP has input data to the calculator incorrectly.

Seems insane.

I thought I had put something in incorrectly myself, so I went back through it and double checked, but everything was right. Bar the child fees we only have £30 total in 'fixed' fees, which is our mobile phones, I put in about £40 each for petrol, other than that we pay everything up front so there is no monthly fee (car insurance, TV Licence, buildings & contents etc). Does seem crazy, I know they stress test for if the rate go's well up, but I think we have a decent surplus each month, but it wouldn't give me any term for what I wanted to borrow.

bobobalde

libf wrote: »

Not sure about Taylor Wimpey but Barratt wouldn't let you reserve until you had an offer on your current property... Guessing if you don't have an exact sale figure that you're not at that stage yet?

Hi,

We are doing the 'easy mover scheme' so they let you reserve and then they try to sell your current house for you - but I don't think we would go through a mortgage application until we had an offer (If we even get one) - so hopefully by then our eldest will be finished at nursery.

My wife is a teacher so in theory we can take the eldest out of nursery when the schools break up for summer.

Having said that when I reduce the nursery fees on the calculator, it says we can borrow £155k but over 34 years!!

I am going to speak to a few brokers at the weekend.

amnblog

Once again I would point out that borrowers using online affordability calculators is a problem waiting to happen.


It is difficult enough for an experienced broker to get a reliable calculation.