Mortgage - Lloyds only offering 3 X salary

realmaverick

My partner and I were due to get our first house together.

My partner is 42 and I am 35.

Lloyds rang me, and invited me to discuss my mortgage needs. The advisor stated that they will lend me between 4 and 5x my salary. Which would have gotten us exactly what we wanted.

I am employed, have a very good salary, zero debt and excellent credit. My partner is self employed, zero debt and a decent salary.

After going through the application, the figure was only 3x our combined salaries, making it under what we needed.

It also come back that it would be over a max of 22 years. Ideally we want to pay it off within 5 years anyway, so that wasn't an issue, but maybe it offers a clue as to why we were only offered 3x?

Is it his age? Or the fact he's self employed?

What else besides age, would have impacted the amount they will borrow? Considering neither of us have any debt at all.

Finally, would a different lender perhaps offer more? And would applying again elsewhere, adversely affect our credit?

Many thanks in advance.

csgohan4

Have you considered using a broker? Lenders don't tell you what their lending criteria are. Even Brokers don't know all of them.


If you apply elsewhere not knowing why you got rejected, your going to end up with lots of credit foot prints.


Have you got all three copies of your credit files for both of you and looked at the history? ignore the score



Need more info like wages and any debts/loan



One of you being self employed is most likely the reason. Do they have SA302 for the last 2 years at least? What do they pay themself?

realmaverick

Hi CSgohan4, it wasn't rejected, but the promise of 4-5 X salary, turned out to be 3x.

If I can figure out if it was his age or the fact he's self employed, I can just make the next application alone.

5x my salary would get us the mortgage we want. And is more than 3x our combined salaries, if that makes sense.

I think the next step is a broker. Will just one additional search have much impact to our credit ratings?

Thanks for your response

realmaverick

Sorry, I missed the bit about credit files. Yes, nothing adverse on either file.

The advisor said it might be age or the fact he's self employed. But he wasn't sure.

Thrugelmir

realmaverick wrote: »

The advisor stated that they will lend me between 4 and 5x my salary.

Potentially up to, there's no certainty. As the actual amount will depend upon your circumstances and the lenders own criteria.

Without more detailed information impossible to say why the amount to be advanced would be limited to 3 times your income.

Keely_lewis

A broker will know who lends what , help you through all the affordability stuff and even make phone calls to clarify what combination to use . We had never used a broker in all our previous moves but a lot has changed in the last 10 years and our broker has been a godsend, worth every penny. Try a few out it make ease the stress considerably , ours did. Good luck

ACG

I suspect you have put your partners retirement age as 64? That will limit the term.

Lenders do not use income multiples, they use affordability. Income multiples is just a guide. One lender saying they will not lend you enough is not all lenders saying it, but I think if you are falling short its not a bad idea to get a broker onboard to help you.

csgohan4

X5 i.e the upper end of your salary would be pushing it and that means you don't have much outgoings. It's best to go way below this in order to have more of a chance to get what you want.


Maybe save some more money for the time being if a broker can't get what you want.

amnblog

This is a difficult one to answer Maverick as we do not have all the detail.

You say your partner has a 'good salary', but your partner is self employed? Lenders are particular how they calculate self employed income so perhaps their view is different to your own.

Mortgage term impacts affordability heavily and some lenders will allow a longer term for a 42 year old.

We don't know if you have deep dents, which affects your affordability, nor what else you have in outgoings.

The simple answer is to consult a broker for maximum affordability but do not set your sights on 5 X income.

cns06

LTD or ST? Divs or PAYE? For SE people most lenders take the last 3 years SA302 figure and average it. If his income last year was a higher than the previous 2 then its quite possible they will come back with a lower than expected figure. There could be other reasons of course.