First time buyers, 1 income, 2 applicants, large deposit being asked for

awilkinson864

Hi,

My Fiancée and I are first time buyers looking to get a mortgage on our first home with only my salary as she is still studying at university.  The deposit amount we are being asked for is 55% of the value of the property if we apply in joint names.

This seems excessively high even on only one income, has anyone ever came across this before or have any advice?

Much appreciated.

Thrugelmir

The deposit is high or the amount you can borrow is low? Your partner will be considered to be financially dependent on you. 

awilkinson864

Thrugelmir said:

The deposit is high or the amount you can borrow is low? Your partner will be considered to be financially dependent on you. 

It's more so that with her being treated as a financial dependent the amount we can borrow is rather low than what would otherwise be the case.  Would it typically be as low as requiring a 45%LTV though?

Thrugelmir

Your ability to borrow will be constrained by what criteria sets with regards to affordability. What you can afford to buy will obviously be constrained by this and the physical cash deposit you have to hand. This is the same for all borrowers. We would all like bigger more expensive properties. 

Chumy

Assuming your salary is 40K 
The Maximum most lenders will lend you is 180K
If you decide to buy a property of say 400k
Most lenders will require a 55% deposit from you - 220k 
This is because the maximum you can borrow is 180K no matter how you look at it, it might be lower depending on your debts and other outgoings.

John_

As above, it’s not that they are insisting on a high deposit, but that they are only willing to lend a certain amount. If you want to buy a house for a lot more than this then you need to find the extra yourself, which is all that the deposit is.

[Deleted User]

If you have a mortgage agreement of £150k and want to buy a house for £170k then you only need just over 10% deposit. 
If you want to buy a house for 300k then you need a 50% deposit.  

The amount you can borrow doesnt change regardless of the house value you are looking at (with small exceptions to the rule obviously if any other brokers were going to pick me up on that)

However,  some lenders are better than others when you have a non working joint applicant on the mortgage.  Some will kill affordability if you add a zero earner, some wont change at all.  Maybe thats the bit you can influence and check you are with the right lender for your circumstances

awilkinson864

Deleted_User said:

If you have a mortgage agreement of £150k and want to buy a house for £170k then you only need just over 10% deposit. 
If you want to buy a house for 300k then you need a 50% deposit.  

The amount you can borrow doesnt change regardless of the house value you are looking at (with small exceptions to the rule obviously if any other brokers were going to pick me up on that)

However,  some lenders are better than others when you have a non working joint applicant on the mortgage.  Some will kill affordability if you add a zero earner, some wont change at all.  Maybe thats the bit you can influence and check you are with the right lender for your circumstances

Thanks, which lenders would you say may be more favourable towards us with the amount we could borrow?

[Deleted User]

No idea, would need to do a fact find and see documentation to give advice. 

Did you do it through a broker? or pick a lender yourself?