Am I likely to get a mortgage (FTB)

richdeniro

I have found a new build in South London on the market for £225,000.

I have a 40k deposit and earn 35k pa. No other debts, completely clean credit rating.

I would be looking at a mortgage of 185k and paid back over 30 years.

I would have to put down the £500 reservation fee in the next few days hence the speediness of coming on here. I will call London and Country tomorrow to see what they say but thought I would just ask now.

ACG

I dont like to say no outright but I think in this instance its a no.

Generally speaking you can lend around 4.5x your income. You can sometimes get 5x income but beyond that is near (if not) impossible.

£35k x 5 = £175k. so you are about £10k shy, possibly more.

richdeniro

ACG wrote: »

I dont like to say no outright but I think in this instance its a no.

Generally speaking you can lend around 4.5x your income. You can sometimes get 5x income but beyond that is near (if not) impossible.

£35k x 5 = £175k. so you are about £10k shy, possibly more.

Thanks - Am guessing the deposit doesn't help too much these days and its more about multiples of income?

ACG

its all about affordability, its just easier to give an approximate figure using income multples. If you have any commitments or debts or kids then that could reduce the figure.

You could have a deposit of £500k but your income will still support a loan of the same amount. If you had a 40-50% deposit you may see some increase but not massively.

Jon_B_2

You say it is a new build. Have you considered help to buy - equity loan?

amnblog

ACG is correct here Rich. You are going to have to find someone to help you bridge the gap on deposit.

richdeniro

Jon_B wrote: »

You say it is a new build. Have you considered help to buy - equity loan?

The developer was offering help to buy.

In my situation what would be a good amount to take for an equity loan? 10k?

Would they talk me through all that if I tell them how much I've got, etc?

amnblog

H2B EL reduces your lending to £168,750 which might work Rich.


How much you put in cash and how much you take on the equity loan is matter for you. (min £11,250)

kingstreet

richdeniro wrote: »

The developer was offering help to buy.

In my situation what would be a good amount to take for an equity loan? 10k?

Would they talk me through all that if I tell them how much I've got, etc?

The choice is 10% of the purchase price or 20% of the purchase price. You don't get to choose beyond those options.

BTW the notional cost of the equity loan is deducted from affordability at around 2% to 4% of the loan amount, so going this route actually sees what you borrow fall further and the max is 4.5 x gross annual income to start with.

richdeniro

Thanks guys - all the help to buy plots in the development have been reserved so I wasn't able to progress any further.