Halifax vs. L&C quotes

samsam89

Hello all.

Obtained a quote from Halifax For mortgage. I earn £23460 pre tax plus tax free bonus of £1400. She earns £11400 pre tax plus tax free bonus of £580. We have child benefit of roughly £1000, and she earns premium for Sunday or which totals £1000 per year. Halifax came back and said we could borrow up to £176k.

We have around £45k in equity from our current place we are going to sell. Halifax said as we are looking at new builds, we could take advantage of HTB equity loan scheme and potentially be able to afford house at £260k as the equity loan would form the difference as it's under 20% of total sale price.

Have just spoken to L&C who said we could afford up to £225k & that their numbers were coming in at same range as Halifax, but that was with help to buy.

A little confused now as the gentleman we spoke to in person at Halifax said a very different thing.

Any experts out there that can advise what's accurate and what's not?

Lilla_D

samsam89 wrote: »

Have just spoken to L&C who said we could afford up to £225k & that their numbers were coming in at same range as Halifax, but that was with help to buy.

I'm afraid I lost you at the above point. What is L&C saying - that you can borrow £225k from Halifax based on your income figures? Then what do you mean by same range as Halifax?

In any case, assuming no children, no credit commitments, nothing extra to consider as a limiting a factor, a quick calculation with Halifax seems to confirm what Halifax said. Please bear in mind that if you buy for £260k, then Halifax takes the 20% loan as a credit commitment, which reduces your max loan and that's how then the mortgage + HtB loan + your deposit add up to £260k.

Does this help?

samsam89

Lilla_D wrote: »

I'm afraid I lost you at the above point. What is L&C saying - that you can borrow £225k from Halifax based on your income figures? Then what do you mean by same range as Halifax?

In any case, assuming no children, no credit commitments, nothing extra to consider as a limiting a factor, a quick calculation with Halifax seems to confirm what Halifax said. Please bear in mind that if you buy for £260k, then Halifax takes the 20% loan as a credit commitment, which reduces your max loan and that's how then the mortgage + HtB loan + your deposit add up to £260k.

Does this help?

It certainly does.

Halifax said we'd be able to borrow £176,000. L&C appear to have said we can borrow just under £150,000. I can only imagine that L&C took our current car payment into consideration when calculating our borrowing capability, despite me clearly stating to them that this will soon be gone. Halifax quoted without car payment so would add up now I think about it.

I am curious as to how much the HTB loan would affect affordability...I'm hoping we can still afford the house at that price with HTB loan added into the affordability equation!

Lilla_D

Yes, if they took into account the car loan, then that would reduce the max mortgage amount. But if indeed you repay it before taking out the mortgage, then it can be ignored.

To answer your question, the reduction in the mortgage amount due to the HtB loan of £52k is about £10k.

samsam89

Lilla_D wrote: »

Yes, if they took into account the car loan, then that would reduce the max mortgage amount. But if indeed you repay it before taking out the mortgage, then it can be ignored.

To answer your question, the reduction in the mortgage amount due to the HtB loan of £52k is about £10k.

Excellent information. Thank you very much for your replies!