Could I be lent a lot more than 4.5x my earnings.

ritz55

I've managed to get 6 times recently so it's possible. Need to talk to a very good broker

surfer9

staffie1 wrote: »

What will you do when interest rates increase and you’re up to your neck in debt?

- I would personally go for a fixed mortgage for at least 5 years.

- I am likely to go from a 30 hour contract to a 35 hour contract before 5 years has passed.

- On top of this there is almost always overtime available at my work, so if I want to up my hours I can work longer. I can go into work on Monday and say I want to do overtime and get it easily and get it for most the week. I can essentially work 40+ hours a week if I want to. I know now people will say - 'well why don't you'..... well in this current situation I likely need to be quick to reserve this property, I don't have time to rack up 3 months of overtime a lender might need to see.

- By my calculations if I was to be lent the money I need to buy the property I am interested in, my disposable income would be ~£400, so I'd be trying to save ~£200 of that per month, every month.

- I also have a side hustle which is only small and is dying out, which I haven't added into that disposable income, which can add an extra £100 - £200 to my disposable income if it continues/survives.

- I am not the type to splash out suddenly on a fancy car or £5000 holiday.

So I feel I could personally repay the mortgage and be comfortable if a lender lent me what I need, but it's not up to me.

lookstraightahead

staffie1 wrote: »

What will you do when interest rates increase and you’re up to your neck in debt?

This is to do with affordability and how you manage your money tighter with luck and personal circumstances. Nothing to do with however many times your salary you borrow. You don't stay in 4.5 times your mortgage all of your life. What happens when this ratio is ovseketd half way through etc?

Sea_Shell

What are you stretching yourself to buy?

A studio flat, or something bigger and more longer term?

Can you not lower your horizons a bit so it's more affordable, or are you already looking at the very cheapest end of your market?

ec9wrr

I personally wouldn’t push my borrowings that high even if a lender would allow it. You mention £400 left at the end of the month. That would be too little for me as a buffer.

surfer9

ec9wrr wrote: »

I personally wouldn’t push my borrowings that high even if a lender would allow it. You mention £400 left at the end of the month. That would be too little for me as a buffer.

ok, I give up

surfer9

This Help To Buy Equity Loan scheme....

Am I right.... you can get the maximum loan a bank will lend you + a 20% top up from the government...

So it's like saying....here, borrow this £40,000 top up from the government too, even though we only think you can afford the £150,000. There....take £190,000 total.

epinjy

surfer9 wrote: »

This Help To Buy Equity Loan scheme....

Am I right.... you can get the maximum loan a bank will lend you + a 20% top up from the government...

So it's like saying....here, borrow this £40,000 top up from the government too, even though we only think you can afford the £150,000. There....take £190,000 total.

More or less yes. New builds only.

ACG

You can get up to 7x income with some lenders who assess affordability manually.

The problem you have is that once you go beyond 4.5-5x income you start to look beyond the high street which in turn means rates start to creep up. I think the highest I have ever done is around 6-6.5x income.

A 5 year fixed rate may even help you get a bigger mortgage, but then you are tied in to paying a higher rate for longer.

I think you could do with sitting down with a broker. Some of the things you mention could help, others probably wont, an extra 5 hours a week if it is not in writing with a definitive date within the next few months, it is unlikely to carry much weight.

kingstreet

Typically, 4.5 x gross annual salary is the maximum at 90% LTV or more, or when using a Government scheme such as HTB Equity Loan or Shared Ownership.

surfer9 wrote: »

I have done these online mortgage calculators that tell you what you could borrow, but how accurate are they compared to what a mortgage broker may lend you when you speak with them and show them the insides out of your finances and financial history?

LACs or lender affordability calculators are usually accurate and brokers don't lend money, we find the Lenders who do...

I was wondering if all or some of the following things could get me a significant extra boost in what a mortgage broker would lend me, other than the typical 4x or 4.5x earnings....

1. No debt.

Means you won't lose borrowing power; not that you will get more!

2. I have the highest credit score possible. Experian score 999

Does your chosen mortgage lender source your credit data from Experian, or Equifax or TransUnion? There's a "999 and declined" thread on here...!

3. No dependents

See 1.above.

4. Huge deposit. For the property I am interested in I have approx a 60% deposit.

Some lenders reflect the lower risk of a lower loan to value with a higher loan amount - the same with a longer-term fixed rate.

5. Potential for my working hours to increase from a 30 hour week to a 35 hour week sometime in the next year.

If it isn't happening now, most lenders will ignore it...

6. Property is near to my work (2miles away) so travel costs will be relatively low.

Most lenders use ONS figures and this won't "touch the sides" as they say...

7. Other then essentials like food, electricity/gas/water, council tax... I won't have any big expenses ie. Phone bills, Gym memberships, etc.

See 6. above.