How to get a higher mortgage on low income?

Johnsmith011995

Hi all

I am looking to purchase a residential property in London. I am looking for something as cheap as possible, my maximum price would be £500,000. I have a deposit of £110,000 from which all the fees will also be paid e.g., stamp duty, mortgage arrangement, etc., so about 100k would be deposit. My annual salary before taxes is 30k and with this low salary I am being offered about 140k. Depending on property price I will need up to 400k mortgage which seems impossible on my salary after all the research I have done.

There is no financial help I can use but I am very disciplined about money and have extremely low expenditure. Having checked monthly repayment calculators I will be able to afford the payments. Is there any way I can get the kind of mortgage I am looking for?

Update
Sorry I should have been more clearer about the situation.

I started my job a year ago after graduation and have also done a year of intern at the same firm during my degree. I am looking to purchase a property not just for myself but also for the family to live in. We have seen a few houses (3/4 bed) around £450,000 so to get that we would need £350,000 mortgage.

We have been renting where dad was paying the rent but cannot continue due to his circumstances. I can technically use his self-employement income as a security if that is possible but I am looking to get a mortgage just under my name for reasons such as first time buyer incentive and dad's age.

theoretica

Would this be a one bedroom property? If you could take in a lodger you might be able to get that potential income taken into account.

I suspect owning a property will increase your spending. Buildings insurance and maintenance, for instance.

Edi81

No. You may be able to afford the payments at low interest rates but what if the rate as 6 or 7%?

BakingC

It may not be the answer you want but I do not think you will have any change of getting such a large mortgage on that income.

You do not only need to be able to afford the repayments now at record low interest rates.

Banks need to be relatively certain you could also afford them at 6-7% interest rates. A 1k mortgage payment now could easily become 1.5k+ when rates move.

Do you have high projected future earnings for staying in London as £30k is very low for London unless you are just starting your career. And if you are just starting I would be hesitant about buying unless you are 100% sure you would want to stay there.

Best option I would recommend is looking on the outskirts towards the end of the lines and making sure you could afford the commute in.

Also you do not state what type of residential property you are looking for? House / flat how many beds?

csgohan4

the income multiplier is x4.5 generally not including debts, with that income, it will be no for that price range. Have a look at the major lender's calculators and see what you can borrow

ACG

There is a lender who will go to 6x income for someone who has newly qualified for a professional job (Dr/Accountants/Solicitor etc), but even that is some way short of what you need.

I am not one for beating around the bush, what you want is not achievable. You are being offered around 4.5x your income which is more or less where lenders top out. Because of the size of your deposit, 5x income is probably achievable and as I said up to 6x if you are a recently qualified professional.

sheepy21

There's no way you're going to get a mortgage for more than ten times your income, no matter how good with money you are! I know London is expensive, but I think 250k is morw than enough for a singleton to get a nice flat. You have to cut your cloth, me and my husband have a combined income of just over 34k and can get a mortgage for 162k, technically we can afford the payments on a bigger mortgage but that's the max so we've had to buy a house based on that.

Johnsmith011995

Really appreciate all the honest answers! Would something like using my dad's income as a security top up the mortgage I can borrow by any chance with having him named on the mortgage itself?

Thrugelmir

Impossible to comment without a full run down on your father's financial affairs. One suspects unlikely.

csgohan4

perhaps you should lower your budget and be more realistic, the lending is more tighter due to stricter regulations and affordability. Can you honestly say you can afford a 0.5m pound home on your salary if the interest rates increased??

Westminster

It isn't (and definitely shouldn't be) possible.

30k Gross gives approx £1980 net per month.

350k mortgage at 6% (let alone the 7% stress test or hopefully unlikely return of 15% interest rates - I suspect you are too young to believe such a thing ever happened) is £2256

Square peg and round hole here - you (and your dad's income) are being protected from yourself. It doesn't matter how disciplined you are, you simply do not earn enough to service 350k at 3% let along a stress test of 6%.