Chances of this income multiple- FTB

Alphabet89

Hi all,
Waiting for the tax year to end so i can submit 1st year self employed accounts- change in structure of work pay.

Looking at new build and using H2B.

I plan to do the following:

Purchase price £215-£220k
deposit -10%
H2B - 20%
Mortgage 70%
No o/s credit (car lease to finish) at time of completion and no defaults at all
Income multiple of mortgage is 3.75- just wondered whether it looks like a possibility.

If i put 5% in the multiple works out at 4.0 Income multiple which would leave more spare but higher repayments.

Thanks in advance

amnblog

Maximum multiple is 4.5

bobothebear

Well I've just exchanged contracts on 4.7 multiple

Thrugelmir

bobothebear wrote: »

Well I've just exchanged contracts on 4.7 multiple

Are you self employed?

amnblog

Maximum HTB multiple is 4.5

kingstreet

The notional cost of the equity loan is 3% and that is taken into account in affordability. As do ground rent and service charges, childcare, dependents, maintenance etc.

So not just credit costs.

I can think of only one lender which might look at a one year SE case on HTB Equity Loan and where we have used this, we have had a number of post-application questions and requirements above and beyond the norm.

You will need broker help with this.

Alphabet89

Thanks kingstreet- I fully intend on using a broker as it isn't your standard setup.

My broker has immediately suggested one high street lender. I can obtain documentation from my 'employer' as i work in a professional practice.

Dogslife4

I managed 6.7 multiple back in 2011. I used a specialist broker that made the case to the lender (then Northern Rock). They based it on affordability, and since the mortgage term was 35 years, this was affordable in spite of the multiple. 4.5 is not a hard rule.

Caz3121

Dogslife4 wrote: »

I managed 6.7 multiple back in 2011. I used a specialist broker that made the case to the lender (then Northern Rock). They based it on affordability, and since the mortgage term was 35 years, this was affordable in spite of the multiple. 4.5 is not a hard rule.

which H2B scheme were you using?...OP is looking to use H2B which now has a maximum of 4.5 times income https://www.gov.uk/government/news/help-to-buy-mortgage-guarantee-loans-new-lending-limits

Pixie5740

Was Northern Rock still issuing mortgages in 2011 and was anyone giving multiplies as high as 6.7 post-2008 (genuine question)? Since then there's also been the introduction of MMR in April 2014. However, all of this is moot since HTB specifies a maximum of 4.5.

Contemptuous

Dogslife4 wrote: »

I managed 6.7 multiple back in 2011. I used a specialist broker that made the case to the lender (then Northern Rock). They based it on affordability, and since the mortgage term was 35 years, this was affordable in spite of the multiple. 4.5 is not a hard rule.

I think you'll find the mortgage market has changed a little bit in the last five years..
Oh and Northern Rock hit a bad patch. I wonder if that was to do with irresponsible lending..?