How much can I borrow?

strawb_shortcake

We are starting to think about moving in the New Year, I'm not in a rush but Husband is getting itchy feet.
I have a modest salary, circa £34k, 3 children and a husband is in year 1 of 4 at uni. 
With the equity from our house we should have around £180k to put towards a new home, we could add to this with savings but would prefer not to use the bulk of it, maybe upto £20k  
I tried to get an idea from Halifax, they said they wouldn't lend, Barclays with less detail said upto £153k. 
We did RTB for our current home so no idea how to get a ball park figure of what our budget is without going down AIP route. 

We've paid quite a bit off the mortgage and reduced down from 32 to 15 years in 5 years, so I really don't want to go back up to 25 years. 
I think we would need to borrow £120k to get to the next house. But I just don't know how to start.
Thank you 

strawb_shortcake

Oh yes, we have no debts at all

Salemicus

An approximate rule of thumb is 4.5x income. Note that 34 x 4.5 = 153, which is presumably where Barclays' number comes from.

strawb_shortcake

Salemicus said:

An approximate rule of thumb is 4.5x income. Note that 34 x 4.5 = 153, which is presumably where Barclays' number comes from.

That just seems a lot when I essentially have 4 dependents. I think £120k would be affordable if I went over 20 years but would need to take account of other bills increasing as it would hopefully be a bigger house.

Salemicus

Ah, so is your question more about what is an affordable and manageable amount to borrow? You are quite right that just because a bank will lend you money, doesn't mean it's a good idea to borrow so much.

For that, you need to think about your budget and outgoings. 

Raffi2020

It may be a case that if you ever apply with a lender they would ultimately lend you less anyway. There are all kinds of complicated affordability tests they will run. They will take dependants like children into account. Some may take pension contributions into account (some don't). They will take debts and credit commitments into account too. 

In addition, when running their own affordability assessments, they will factors other things in, such as expenses and commitments you might be expected to make (these will usually come from ONS averages of what people spend rather than asking for your own assessment of your spending). They will also "stress test" your affordability, which basically tests if you could afford higher rates if in theory the interest rate crept back up.

None of this means you couldn't get the £153k, but ultimately they will fully assess your circumstances and a final offer may be lower than the "up to" figure. 

strawb_shortcake

I think I'm just more anxious about making the wrong decision, but then I don't have the appetite to move as my Husband does, but will be responsible for paying the mortgage. 
If we were to go to £320k then that's not going to get us much more than we've got now, but would get us a garage. Our current home has two massive advantages over any other house we could afford to buy. If we had space to add a garage then our house would be perfect. 
We are tied to the area due to schooling, so would be moving within a 0-7 mile radius.

The reality with my salary is that my next promotion (hopefully in next 12-18 months) would only take me up to £37k, being public sector I'm not looking at any noticeable pay rises until a further promotion but I don't expect that for another 10 years, that would see a jump of around £10k. 
My Husband is not in a position to be earning for 4 years assuming uni goes to plan, so our income is going to remain quite static for the foreseeable. 

My Husband has had some health issues in the past, my gut feeling is that we should wait so he can fully concentrate on uni and then move.

Maybe I just want it to be unaffordable so that I get my own way??

Suseka97

One way to know for sure would be to speak with a broker, they would be able to give you an indication of where you stand in terms of affordability.  
If it were me I'd be staying put too - a garage is a nice to have, but if you've managed well enough without one up until now then you can continue on for a while longer.  
Moving (buying and selling) can be, and often is, quite stressful - so perhaps you husband needs to focus on his degree course or at least get through the first year or two.