Lending 125K on 27k wage

tomr2992

Hi all.For my sins I'm a police offcier and earn 27k a year before O.T (usually 3.5K per year). I currently have a mortage of 93.5K and I'm looking at lending a total of 125k in order to purchase a larger house (family on route!).
I've been with my current lender for 3/4 months (Scottish TSB..it is different I'm told). I bank with TSB so I hope this will be of advantage, I've got good credit too.
I'm at a bit of a lose end in relation to what term to take (30-35year) and slightly worried that I won't be given the required amount. Your views in relation to this would be greatly appriciated. I'm I out of my depth requesting this or would this be considered resonable?

Many thanks, Tom

firesidemaid

if your overtime is regular and appears on your wageslips then you can normally include this for mortgage purposes.

do have any other outstanding debts/loans?

will there be a deposit?

if you have only been with your current lender a few months are you in a fixed period deal? if so you would probably have to approach them first or pay penalty fees to leave.

hopefully a mortgage advisor will come along shortly.......

A_Nice_Englishman

You want to borrow about 4 times your income which isn't unusual these days. As sazzacat says, hopefully a mortgage advisor will be along soon with suggestions.

You may wish to work out your monthly outgoings (including baby food and nappies as you have a family on the way!) and compare these with your take home pay with and without overtime to make sure you won't get into difficulties if the overtime dries up.

herbiesjp

Getting the mortgage amount agreed should not be a problem with several lenders, assuming no other debts and good credit history

HOwever as you already have a mortgage are you looking to port your mortgage to a new property? Or are you looking for a brand new property/mortgage altogether - if so, do you have any penalties to leave your current lender

tomr2992

Ideally I'm looking to port my mortgage. Its currently set at 4.49%. I have requested a "bolt on" if this is the right term however I have yet to hear back from TSB.
I am unaware if I incure any penalties as I write this. I will dig out the paperwork and find out.
As for my outgoings I have no loans but there is finance on a car for £125 a month.
Thanks for the replys.

herbiesjp

YOu would therefore need to reduce your earning by £1500 to allow for the car finance

Porting should be option for you, as I'm guessing you will be tied in for a certain period of time. If you take aout another deal for the extra money needed, make sure that it expires as near as possible to the original deal, in order to allow you to get a new deal on the full amount next time around (as opposed to two separate deals) as this will make leaving LTSB easier should you not want to stay with them

oliroe

Surely he would have to gross up the £125 a month making it around £2k off his salary

herbiesjp

YOu have to annualise the credit commitment

lynnexxxo

I thought that police officers get very cheap mortgages ? Is that a myth?

izboo

I am no expert but from your original post there are a few points that might be worth considering but with the important proviso that as your current fixed rate is far better than any new deal you are likely to get you should try to keep that if possible - although you don't mention how long the fix/full term are for this existing product.

You mention pretty long terms in your original post (30-35 year). The longer the term the less capital you pay off in the initial years so it might be worth considering takinging out the additional borrowing as interest only (if your current provider will allow this) - bear in mind though that some lenders will require a parallel repayment vehicle for this loan but some might not. Some lenders will allow higher salary multiples for interest only and after five or so years your salary might have increased a fair bit making it easier to switch the whole amount to a repayment product. Try putting figures into the various mortgage calculators that are available to see how much capital you would pay off in the first few years under repayment and compare with interest only - then try over different terms. You mention that you are a police officer - without knowing how old you are or your length of service bear in mind that you might want to retire before that term ends and would probably need to use some of your pension lump sum to pay off the outstanding balance.

HTH

Izboo

izboo

I am no expert but from your original post there are a few points that might be worth considering but with the important proviso that as your current fixed rate is far better than any new deal you are likely to get you should try to keep that if possible - although you don't mention how long the fix/full term are for this existing product.

You mention pretty long terms in your original post (30-35 year). The longer the term the less capital you pay off in the initial years so it might be worth considering takinging out the additional borrowing as interest only (if your current provider will allow this) - bear in mind though that some lenders will require a parallel repayment vehicle for this loan but some might not. Some lenders will allow higher salary multiples for interest only and after five or so years your salary might have increased a fair bit making it easier to switch the whole amount to a repayment product. Try putting figures into the various mortgage calculators that are available to see how much capital you would pay off in the first few years under repayment and compare with interest only - then try over different terms. You mention that you are a police officer - without knowing how old you are or your length of service bear in mind that you might want to retire before that term ends and would probably need to use some of your pension lump sum to pay off the outstanding balance.

HTH

Izboo