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Mortgages affordability - savings and shares
kilby_007
Posts: 738 Forumite
Hello,
I was just wondering how mortgage companies look at affordability?
We want to borrow 140K, which is only 2x my income, but at the moment it doesn't look like we're saving much of our earnings on the face of it. Due to an expensive few months with cars, insurance and other bits and pieces we haven't been saving as much as we usually do. I put a large proportion of my salary into company shares (guaranteed money back) which is taken from my pay and I can withdraw this at any time.
I currently pay £700 in rent. Our mortgage payments will be about £600 per month (over 25 years), so less than our rent although we will need to continue renting for up to 6 months whilst renovating. We have a 30% deposit and another pot of money (enough to build a large extension and renovate) in savings accounts, plus extra to cover renting and anything else that crops up.
I'm more than happy that we can pay the mortgage and probably be mortgage free in about 8 years by overpaying, but I'm concerned that my complexed financial arrangements might be difficult to explain to a lender and I might be rejected. Should I declare my share payments, and if I don't, will the lender wonder why the monthly PAYE payments paid into my bank are considerably lower than my stated salary?
I was just wondering how mortgage companies look at affordability?
We want to borrow 140K, which is only 2x my income, but at the moment it doesn't look like we're saving much of our earnings on the face of it. Due to an expensive few months with cars, insurance and other bits and pieces we haven't been saving as much as we usually do. I put a large proportion of my salary into company shares (guaranteed money back) which is taken from my pay and I can withdraw this at any time.
I currently pay £700 in rent. Our mortgage payments will be about £600 per month (over 25 years), so less than our rent although we will need to continue renting for up to 6 months whilst renovating. We have a 30% deposit and another pot of money (enough to build a large extension and renovate) in savings accounts, plus extra to cover renting and anything else that crops up.
I'm more than happy that we can pay the mortgage and probably be mortgage free in about 8 years by overpaying, but I'm concerned that my complexed financial arrangements might be difficult to explain to a lender and I might be rejected. Should I declare my share payments, and if I don't, will the lender wonder why the monthly PAYE payments paid into my bank are considerably lower than my stated salary?
0
Comments
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You are looking for a problem that does not exist.
Your lending to income ratio is about half what Lenders offer every day.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
You are looking for a problem that does not exist.
Your lending to income ratio is about half what Lenders offer every day.
It's not the income ratio that bothers me, just the act we haven't demonstrated that we can save much of our income over recent months and a lot of my income goes straight into shares. This was my query.0 -
You are looking for a problem that does not exist.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
This level of micro-management simply isn't required.It's not the income ratio that bothers me, just the act we haven't demonstrated that we can save much of our income over recent months and a lot of my income goes straight into shares. This was my query.
Lenders take no interest in savings patterns. Check affordability on lender online affordability calculators. None ask about savings.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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