my bank account will be empty after I paid my 10% deposit

Crumble2018

Slappermum said:

Crumble2018 said:

Slappermum said:

How on earth did you pass affordability?

Affordability is not based on whether you have savings - it's based on whether you can afford to pay the mortgage - which we can.

Yes, but based on your previous description of your circumstances, you are only just able to pay the mortgage (your emergency fund is a credit card and not eating and you will "never save"). I was always under the impression that affordability involves being checked against a significantly higher interest rate (and monthly instalment) than the one agreed.

I am not judging or picking a bone here, just genuinely surprised.

Slappermum said:

Crumble2018 said:

Slappermum said:

How on earth did you pass affordability?

Affordability is not based on whether you have savings - it's based on whether you can afford to pay the mortgage - which we can.

Yes, but based on your previous description of your circumstances, you are only just able to pay the mortgage (your emergency fund is a credit card and not eating and you will "never save"). I was always under the impression that affordability involves being checked against a significantly higher interest rate (and monthly instalment) than the one agreed.

I am not judging or picking a bone here, just genuinely surprised.

We can afford the mortgage, and could afford it if it went up - but we don't have enough left over to save, have holidays etc. When I talk about emergency fund, I mean if one of us lost our jobs, or the boiler packed up (in other words, large expenses)

Slappermum

Couldn't you establish an emergency fund with the money that you would use for the mortgage if it went up?

Crumble2018

Slappermum said:

Couldn't you establish an emergency fund with the money that you would use for the mortgage if it went up?

Of course, but at the moment we are choosing to use the money to improve the flat we have just bought. But realistically, we will never build up significant savings as something always crops up that uses the money. 

annetheman

Slappermum said:

Crumble2018 said:

Slappermum said:

How on earth did you pass affordability?

Affordability is not based on whether you have savings - it's based on whether you can afford to pay the mortgage - which we can.

Yes, but based on your previous description of your circumstances, you are only just able to pay the mortgage (your emergency fund is a credit card and not eating and you will "never save"). I was always under the impression that affordability involves being checked against a significantly higher interest rate (and monthly instalment) than the one agreed.

I am not judging or picking a bone here, just genuinely surprised.

That worries me now because my mortgage adviser looked at my base pay in December vs my base pay now  and I could never have afforded the place I just applied for a mortgage for yesterday back then. But then I only have been in the role just over 2 months, so my third month i.e. Dec 2019 bank statement is relatively "unaffordable".

I thus assumed they would take into account pay increases and career progression/bonuses etc when assuming your future affordability after interest rate/service charge/etc increases; could an actual mortgage adviser corroborate this? Am I going to be rejected?

This is tense! I'm never moving if I get this place, ever.

MovingForwards

@annetheman lenders consider your financial situation now, not career progression / payrises. They assess if your current wage and declared outgoings will cope if interest rates changed.