Consideration of investments in mortgage eligibility

dc19v0

OK thanks. Strange system as I would be "better off" not additionally saving/investing at all, not for rainy day or long term like pension, and just focus on deposit, deposit, deposit. I spoke with a bank today and they don't even care I have an emergency fund in case of unexpected spending or loss of employment. Income minus monthly payments is all they care about. Is the income stable? What happens if it changes? We'll cross that bridge when we get there. But it's only 2.whatever % interest!

As mentioned it doesn't pay to be a responsible saver/investor. I will divert from investing to make sure I get the best LTV rate.

Thrugelmir

dc19v0 wrote: »

OK thanks. Strange system as I would be "better off" not additionally saving/investing at all, not for rainy day or long term like pension, and just focus on deposit, deposit, deposit. I spoke with a bank today and they don't even care I have an emergency fund in case of unexpected spending or loss of employment. Income minus monthly payments is all they care about. Is the income stable? What happens if it changes? We'll cross that bridge when we get there. But it's only 2.whatever % interest!

Nothing strange at all. Banks have been supplying mortgage for decades. As a whole the system works and results in minimal defaults. Banks look down from a macro level with a mortgage book consisting of thousands of individual accounts. Whereas as you are looking upwards from a micro level talking about just yourself.

hoc

Macro vs micro perspective is fine, the issue (or advantage, if in your favour) is the simplicity of the mortgage arithmetic. A first time buyer getting 3x income vs BTL getting 5x is understandable statistically. A first time buyer who has barely managed to put together the minimum 5% deposit with no emergency fund or plan getting same 3x as someone who has same income-outgoing profile but also 10K extra sitting in the bank is the issue. Anyway, this seems a rarerity in itself as the majority in the UK would just throw that 10K into the deposit.

I find the UK mortgage system similar in social/cultural sense to the US credit card system where most live "paycheck to paycheck". To many "go for broke" so to speak.