Mortgage advice from 1st time buyer

jonny5_3

Quote: "How can a guy earning c£15K a year be allowed to borrow 10 times his income?!!!!"

If you read the first post properly you will see its me and my partner. She earns £11K basic but took home 18K total last year on commsion and myself earns approx 12k at the moment.

In terms of who would i use as an empoyer, well i have a proper registered business which i could become employeed by, being VAT registered for nearly a year now and are on the web, and physical unit premsises, the business that i would be employeed by is not exactly a 'made up business'.

Meanmachine, try not to be so aggressive, im a FTB with little mortgage experience so im here for friendly advice.

meanmachine_2

Forgive me Jonny, I'm not having a go at you, and never would at a FTBer. I can entirely understand where you're coming from.

But it does seem that brokers have thrown out the rule book when it comes to mortgages.

OK, so you've provisded us with more detail - the company is LTD and you're presumably a director. That changes things a little, I should imagine.

You didn't mention your girlfriend's income, only your own so I assumed that the mortgage was in your name only.

Good luck with the business by the way!

herbiesjp

jonny5

So you have got around 30k coming in between the two of you. Abbey could give you just over 4 times your income, but this would only give a loan of around £126k. That is without taking into account any loans credit cards etc that you may have outstanding.

Has the broker got this agreed in principle for you? If he has ask to see the printed off form, as this will list what Abbey will require at the outset - they may ask for further information.

If he has not I would send in the full application until he has, as this might give an indication as to how much they will offer you by way of a mortgage.

Are you paying this broker a fee?

meanmachine_2

OK, so £126K plus 10% equals £140K, doesn't it? So it sounds like the broker isn't pushing it too far.

But that's on the basis of 4x joint income. I thought 2.5x joint was standard.

Or am I just hopelessly old fashioned?

Still, the guy clearly feels that his business is going to grow. He could be on £50K by this time next year!

jonny5_3

Herbiejp, I have seen the 'key facts' printed copy which i have infront of me but no mention of what will be required.

The broker has agreed this in principle and no i am not paying him a fee.

dougk_2

Mean Machine,

Abbey tend to treat couples as individuals (as every lender should) and I believe they lend up to 4.2 x the income.

I beleive that these joint multiples are wrong sas they are (it should be the same as for indviduals) It's basically because traditionally one of the couple worked and the other didn't - its not that way anymore is it. Besides bills for two people are not double what they are for a single person.

herbiesjp

jonny5

The key facts illustration is just a quote - ask to see a copy of the agreement in principle if he has done it, as this is a different piece of paper to the key facts illustration.

Please note there is a difference between the broker saying it is agreed and should be ok, and paperwork from the lender saying that it has been agreed

payless

doug
at 90% , income below £35Kpa , Abbey's published criteria ( as at 2/05 anyway)
is 4.1 x sole applicant, or 3.4 X total income for joint applicants

meanmachine_2

payless wrote:

doug
at 90% , income below £35Kpa , Abbey's published criteria ( as at 2/05 anyway)
is 4.1 x sole applicant, or 3.4 X total income for joint applicants

I think these criteria are slack anyway and will tighten no doubt as bad debts soar.

So 3.4 times £30K is £102K. Hmm, looks like the broker is being "creative" on more than one front.

Should couples be treated the same as an individual? Hmm, not sure. On the one hand if one is sacked or dies, the other can continue with payments, but on the other, it's normally assumed that one of them will get pregnant, or just as likely these days simply leave.

There's a reason why couples are NOT treated the same as individuals.

Or maybe I'm just old fashioned.

stevenp_3

just dont go for the "Regal financial institute north of the border" :mad:

They gave me "really bad service"