Wrapping my head around affordability

lewishardwick

It never rains but it pours...

So, o/h and I were slowly progressing a joint property purchase. Yesterday o/h was suspended under an allegation of gross misconduct. Likelihood of losing job - high.

Now, I am aware I/we need to advise our lender/broker, especially as we haven't exchanged or completed yet. I would assume not doing so is fraud.

I had originally done the maths, I can afford to run the property on my income alone. I would have a few hundred after all essential expenses (mortgage, bills, food, even the luxuries of car and gym etc).

However, if I were to apply on my own, I would probably be about £18k short based on 'affordability'.

Now this got me thinking, hypothetically:

Maximum borrowing: £240k
Property value: £258k
Mortgage Product: Barclays HTB 95% LTV


So, all things going well, Barclays would only lend me up to £240k, so I would need a 5% deposit for THAT amount? So £12,000. In ADDITION I would also need to source another £18k?

I might be OK, online 'affordability' calculators seem useless and suggest £140k maximum.

We were offered up to £330k based on my salary for £44,800 and o/h of approx £27,000.


I guess, just as I finish typing, I should go back to my mortgage broker and see if he can work his magic with the numbers!

Hurrah!

amnblog

Make it the brokers problem.

Thrugelmir

lewishardwick wrote: »

I had originally done the maths, I can afford to run the property on my income alone.)

What long term interest rates are you basing your assumptions on?

lewishardwick

Thrugelmir wrote: »

What long term interest rates are you basing your assumptions on?

I was using the SVR after the fixed fee expired. 3.99%. I had also run numbers at 5%. Anything higher and I would start to tighten my belt. 7% would be tight.

I (personally) don't think it wise to get a mortgage where you aren't able to afford some nice things in life and have some spare cash for that exact reason. I might find once the fixed rate period has ended the interest rate has crept (or jumped!) up and my options for a 'good' rate are limited.

ACG

Do not hold me to this, but if you complete before the disciplinary then I do not think it would need to be declared. It is only of any confirmed changes to your circumstances.

The reason I say this is that I did a Mortgage for a lady a year or so back and in the paper it was announced her employer would be making 1500 redundancies most of them would likely be from the office she was in. I spoke to the lender and they basically said that as she had not been put under review it was fine to proceed unless that changed prior to completion.

lewishardwick

Thanks.
I will see what the broker says. He did ask if either of us knew of any impending redundancies or anything that might put our jobs at risk. At the time he knew nothing.

But yes, we shall see! There's an interview he's required to attend on Jun 10th. So hopefully he'll know more by then.

Thrugelmir

lewishardwick wrote: »

I would assume not doing so is fraud.

What did the declaration on the application form say? That's if you read it.

Bonfire_Bride

I know this isnt the reason for the OP...but, if it is highly likely that he will lose the job...could he push for a compromised agreement? This will help him when looking for future employment.

It is a horrible thing to experience but you'll get through it.