Want to borrow more

bartmatt

Hello everyone,

Just looking for some advice.

Currently we are looking to move to a new property. We are looking at around £650,000.

We will be selling our house and will have around £100,000 deposit for the next property so looking for around £550,000 mortgage.

Halifax and Santander have said the most we can borrow is £480,000.

Does anyone know if we should look else where or any ideas on how we can borrow the extra?

Earnings are roughly as followed:
£25,000 - Partner
£27,000 - Myself
£50,000 - 50/50 Limited Company Profit

Any advice would be much appreciated.

Thank You

HappyMJ

bartmatt wrote: »

Hello everyone,

Just looking for some advice.

Currently we are looking to move to a new property. We are looking at around £650,000.

We will be selling our house and will have around £100,000 deposit for the next property so looking for around £550,000 mortgage.

Halifax and Santander have said the most we can borrow is £480,000.

Does anyone know if we should look else where or any ideas on how we can borrow the extra?

Earnings are roughly as followed:
£25,000 - Partner
£27,000 - Myself
£50,000 - 50/50 Limited Company Profit

Any advice would be much appreciated.

Thank You

Either save more, earn more or look for properties around £580,000.

You've already got an offer 4.7 times your gross income. You've got income tax and national insurance deductions to make from your gross income figures so you would be left with £6,000 per month. The mortgage payment on £480,000 over 25 years at 4% would be £2,500 per month. That's quite tight leaving you with £800 per week for all of your expenses. I imagine a £650,000 property is going to cost significantly more (maybe 3 times more) to furnish, heat and maintain than an average £200,000 property.

bartmatt

I understand where your coming from, We both work in London and we are needing a bigger house due to a growing family but due to the cross rail we don't really want to wait as prices are still increasing significantly.

We are looking at mortgages that are over 35 Years as we are both 27 years old.

So if it was £550,000 mortgage with a 15% deposit over 35 years would be around £2000 a month at 2.5%

We are also looking at houses that are fully refurbished.

We don't spend much a month, maybe around £250 a week including food.

kingstreet

No mention of credit commitments, nor dependents so presumably none?

Your joint incomes are £102k. Presumably these are the latest year's and not averaged over the last two years, as you will need to do being self-employed?

£550k would be 5.39 x income and such a borrowing level is no longer available.

My Halifax calculator output is £408,000 over 35 years, not £480,000 for a couple earning £102k.

Have you appointed a broker to do this for you, or are you trying to do this direct?

bartmatt

We have no credit cards, debts or loans etc.

Our crediting rating is both over 700 as I assume it is this due to getting our mortgage, joint account etc only August last year.

We currently have 1 dependant, 1 week old

The rate of £480,000 was through a mortgage broker.

HappyMJ

bartmatt wrote: »

We have no credit cards, debts or loans etc.

Our crediting rating is both over 700 as I assume it is this due to getting our mortgage, joint account etc only August last year.

We currently have 1 dependant, 1 week old

The rate of £480,000 was through a mortgage broker.

What is the revert to rate on the mortgage that has been offered to you?

Affordability should be calculated on that rate...not on the introductory teaser rate.

bartmatt

Im not sure about that question.

All i know was it was just a mortgage in principle so assuming not confirmed at £480,000 at 2.09%

I think the way forward for me would be to find a property around £550,000 so not stretched too far. Its just hard where we are.

kingstreet

The affordability calculators should be re-keyed with the dependent added, along with any future childcare cost as you will be asked about this by lenders.

HappyMJ

bartmatt wrote: »

Im not sure about that question.

All i know was it was just a mortgage in principle so assuming not confirmed at £480,000 at 2.09%

I think the way forward for me would be to find a property around £550,000 so not stretched too far. Its just hard where we are.

Most standard variable rates are 4%. Some banks with especially low introductory rate have higher standard variable rates. Let's say it's a 2 year fix. You might get 24 payments at £2,000 then your payments will increase to £2,500 per month...or more...you could of course re-mortgage in 2 years but you will have the same affordability issues then as you do now and if you haven't been saving for the fees over the next 24 months you may need to add them to the mortgage which would then require you to earn more money to afford the additional borrowing making it even more difficult to find a lender. You may be stuck on the standard variable rate for some time.

bartmatt

Ok thank you for all the information and help.

I think we will lower the maximum we buy up to as don't want to max ourselves out.

Or look for a third job as I am a bit of a workaholic.

Thanks again everyone

ladybabe

bartmatt wrote: »

I understand where your coming from, We both work in London and we are needing a bigger house due to a growing family but due to the cross rail we don't really want to wait as prices are still increasing significantly.

We are looking at mortgages that are over 35 Years as we are both 27 years old.

So if it was £550,000 mortgage with a 15% deposit over 35 years would be around £2000 a month at 2.5%

We are also looking at houses that are fully refurbished.

We don't spend much a month, maybe around £250 a week including food.

so you are not planning to have anymore kids? the next affordability will take into consideration your child/childcare costs etc future childcare costs if you have more kids and whatever % stretch the mortgage provider apply to their calculations.