Mortgage based on affordability rather than x6 my salary?

tallmandat

Hi guys

Firstly sorry if this is in the wrong category I couldn't find one specifically for mortgage advice....

Just had our home evaluated for £350k 

I'm willing to sell for £340k depending on the offers. I've got 80k (including pen charges) to pay off existing mortgage lender. Kiss goodbye to a further £25k on stamp duty, agency fees, solicitor fees, etc. So I'm left with £235k equity, am I right?

I'm on £40k salary and my wife works part time she's on £3,600 a year. We have two kids boy 10 the girl is 8.

The 3 beds I've been looking at are £450k to 500k. So I'd need to borrow at least £215k ideally £240k to get us a chance of moving into a decent home in a decent area. 
All the lenders I've checked with online and in the phone say I can borrow around £180k max.

So is my desired target of borrowing £215-240k a pie in the sky? Do these type of lenders exist and what's the catch? 

Got no debts except 1 credit card with £2300 and no savings... 

My wife also started working part time since may and self employed. Made £18k so far but a lot of it went on clearing debt. 

Any advice or hope thrown appreciated. Thx

MFWannabe

1) you can’t really afford to sell at 340k as you need to get the best price you can 
2) Is the debt 0% or high interest? 

3) I’m no expert but there aren’t any lenders that would lend 6 x your salary 
4) You need to build up some savings, you have nothing to fall back on for emergencies 
5) Contact a broker and they will advise how much you would be able to borrow based on you circumstances 
6) Do you definitely need to move as you have very low ltv at the moment; is it for better house; better area, both? 

MaryNB

I've only seen 5x (nevermind 6x) offered to people with a higher salary and low LTV.

I think you need to allow for 4.5x which is far more realistic.

K_S

tallmandat said:

Hi guys

Firstly sorry if this is in the wrong category I couldn't find one specifically for mortgage advice....
Just had our home evaluated for £350k 
I'm willing to sell for £340k depending on the offers. I've got 80k (including pen charges) to pay off existing mortgage lender. Kiss goodbye to a further £25k on stamp duty, agency fees, solicitor fees, etc. So I'm left with £235k equity, am I right?
I'm on £40k salary and my wife works part time she's on £3,600 a year. We have two kids boy 10 the girl is 8.
The 3 beds I've been looking at are £450k to 500k. So I'd need to borrow at least £215k ideally £240k to get us a chance of moving into a decent home in a decent area. 
All the lenders I've checked with online and in the phone say I can borrow around £180k max.
So is my desired target of borrowing £215-240k a pie in the sky? Do these type of lenders exist and what's the catch? 
Got no debts except 1 credit card with £2300 and no savings... 
My wife also started working part time since may and self employed. Made £18k so far but a lot of it went on clearing debt. 
Any advice or hope thrown appreciated. Thx

@tallmandat A few general points -

- if recently self employed, your wife's income is unlikely to count. The £3,600 part time income *may* count depending on the specifics (type of contract, payment pattern, etc)

- based on the limited info in your post, assuming you wife's income is counted, your very max borrowing (assuming the background circumstances fit the criteria) at mainstream rates is like to be in the region of 200-205k or so.

- the positive is that for 215k mortgage for a 450k purchase, you're looking at <50% LTv which is great from the lender's point of view if it comes to matters of underwriting where there is some subjectivity or discretion.

If you want to make sure borrowing is maximised, I would recommend that you get in touch with a broker and ask for advice on how much you can potentially borrow. Good luck!

ACG

I would agree with KS, I think £190-205k is probably about the max you will get at normal rates. I do not think you are going to get £240k and £215k if available is going to be with a quirky lender (quirky is code for higher rates). 

fred246

I think 2008 was the end of 'liar loans'. We got one prior to that at 6x.

Redwino222

I know 5is isn’t what you asked, but how would such a big mortgages repayment impact your lifestyle?  On a much lower mortgage payment you have no savings and some debt.