How close to borrow amount

Carl2510

Hi everyone,

what would be recommended on how close of a purchase price to go for with how much you can borrow is it unlikely lenders are to give you say a 170K loan when your limit is 175K or do they give people the max amount they are after.

Thanks.

Moneyminded

It depends on your credit history, your current financial commitments and the property itself. If you have a good history of managing you finances well and you have low ongoing financial commitments it is likely that you could get near the top of the affordability limit. If you have some debt this will likely reduce the amount of loan a lender is willing to give you. 

Carl2510

Are these affordability calculators to be taken seriously as different ones come out with different answers.

csgohan4

Carl2510 said:

Are these affordability calculators to be taken seriously as different ones come out with different answers.

Really depends on the lender and your own circumstances, baring in mind debt reduces the amount you borrow. If your not sure I would go through a broker to go through things with you and find the right lender for you

Moneyminded

Carl2510 said:

Are these affordability calculators to be taken seriously as different ones come out with different answers.

The calculators are intended to be a rough guide. Each lender will have their own calculations and lending criteria. If you want to get a better idea based on your personal circumstances I suggest you speak with an experienced broker, especially if you are looking to lend near the max. 

NewShadow

There's also an element of both loan to value and minimum value of the house; meaning, if you can theoretically borrow £170 but you're also looking to buy a house for £170, you'll likely only be loaned a maximum of £161 - i.e. 95% of the house price - and will be expected to put down the remainder as your deposit. 

Depending on the mortgage product you want/who it's with, the max LTV you could get could be anywhere from say 95% to 75% - so you could be offered a maximum of between £127 and £161 for the same £170 property. 

Carl2510

I do currently have a broker, but I do feel he goes with the same company all the time and they do come out on top when lending me the most.

Carl2510

He crunched some numbers and it came out with £182K we could borrow with a certain lender, we are currently looking at a new build for 195,995 with a 20% deposit so that would be £156K mortgage required, but also looking at one that would be 210K with also 20% deposit which would require mortgage 168K would you say they are pretty doable.

Carl2510

Debt wise I have nothing bar a car on HP which ends next Feb. And the partner has no debt either.