Mortgages - Who will lend high salary multiple?

sarahhj

Hi,

My husband and I want to buy our first property. Finding a mortgage is so far proving difficult.

We need quite a high income multiplier. I keep hearing that people will lend 5 or 6 x salary - so who are they?!

Hope someone can help, Thanks,
Sarah

cannycat

Though you will pay a higher interest rate, the companies I'm aware of that will lend you 100%+ of a property/more than 3.5 times salary (yes, even as a first time buyer) are:

- Northern Rock (approach direct or via broker)
- Alliance and Leicester (only available via broker)
- Coventry (not quite sure about the last one as though I've read about it on the Internet no mortgage broker I've spoken to so far seems to have heard about it.)

This was correct a few weeks ago, however the situation may be more volatile now in the light of what's happening to the stock market due to the situation in America. Though of course it couldn't happen here, the economy is far too stable.

MortgageMamma

UKremortgageBroker wrote: »

These high income multipliers are not usually available to first time buyers who want 100% mortgages. With over 40,000 different mortgages in the UK your search will be difficult and you may need the services of a good whole of market mortgage broker to identify that one product that is the most suitable for your circumstances.

Read the OPs post properly. They dont say anything about wanting a 100% mortgage and there are high income multiples at 100% available to graduates. You did not ask their occupation before stating such mortgages were not available.

To the OP, there are lenders who work on affordability opposed to income multiples. this can sometimes work in your favour. The affordability calcs can often be complex for the untrained eye, and an affordability lender would typially offer a 40% DTIR (debt to income ratio) and some will go to 45-50%, some more, dependent upon your income, employment status and other details.

I think if you are looking for a specific mortgage the best way to find it is through a good EXPERIENCED whole of market mortgage broker. Please do not approach individual lenders directly, they will all credit check you and too many credit checks over a specific amount of time can really screw up your credit rating, leaving you with less chance of securing a loan when you do find the right lender.

ixwood

Don't do it. 5 or 6 times your salary now? You'd have to be mad IMO. Hold on and save, I'm sure there'll be a better time to buy than now.

MortgageMamma

ixwood wrote: »

Don't do it. 5 or 6 times your salary now? You'd have to be mad IMO. Hold on and save, I'm sure there'll be a better time to buy than now.

Its not that straightforward, 5-6 x salary to someone on 30k would be crippling, but 5 or 6 x on someone earning much more (say 60k joint upwards )would have less of an impact, as the additional cost of living besides the mortgage is in much smaller proportion to their earnings and mortgage.

sarahhj

Thanks for the replies so far.

We have looked very carefully at how much we can afford to spend on the mortgage per month.

Jointly we earn about £40k and are looking for about £210k on a property of say £220-225k. Essentially, we will easily be able to get a 5% deposit together on a property valued at £225k and just want someone who will lend us the rest. We were thinking of an interest-only fixed rate for 5 years so that we have stability in repayments until our salaries increase.

The search will continue!

MortgageMamma

why don't you just save yourself the time and use a broker?

mystic_trev

sarahhj wrote: »

Thanks for the replies so far.

We have looked very carefully at how much we can afford to spend on the mortgage per month.

Jointly we earn about £40k and are looking for about £210k on a property of say £220-225k. Essentially, we will easily be able to get a 5% deposit together on a property valued at £225k and just want someone who will lend us the rest. We were thinking of an interest-only fixed rate for 5 years so that we have stability in repayments until our salaries increase.

The search will continue!

So you're happy to pay £1,200 - £1,300 per month are you?

sarahhj

mystic_trev wrote: »

So you're happy to pay £1,200 - £1,300 per month are you?

Well, yes actually.

My husband will have a pay rise in September and again in April, myself in Novemeber and again in the summer next year. We would also be able to get monthly help with repayments if needed, just not any more in a lump-sum for a deposit.

I am just asking about who lends high multiples, not asking for someone to look at my income & expenses. I am training as an accountant, so I can do that for myself.

Again, thank you to those who have helped. I will be looking into brokers on Monday.

GunJack

Just to chip my oar in, Northern Rock have just given me £170k on property worth £200k, on a salary of £36k, so 4.75-ish times salary. 15 yr fixed rate, too


I know it may not be everyone's cup of tea, but it's portable (if you want to move house, take it with you), and fixed payments coupled with rising salaries means more cash in your pockets to save/holidays/whatever...

homer_j_3

cannycat wrote: »

- Coventry (not quite sure about the last one as though I've read about it on the Internet no mortgage broker I've spoken to so far seems to have heard about it.)

This was correct a few weeks ago, however the situation may be more volatile now in the light of what's happening to the stock market due to the situation in America. Though of course it couldn't happen here, the economy is far too stable.

Im not sure which brokers you have been speaking to but the coventry is known to most brokers that I know. They will only offer 4 x salary though and will be potentially more restrictive than the others but if the credit rating is low, then can offer more than the other 2 lenders you mentioned.