First Direct income multiples

figgyroo

My current mortgage is coming to the end of its fixed rate period so I am trying to arrange a re-mortgage and am interested in the First Direct fixed rate. I noticed on their website they say they usually lend up to 3.5 x salary and I require nearly 4 x salary. I called them to discuss this and was told they are very busy and someone would call me back to discuss it with me within the next 10 days. I am only looking to lend approx. 50% of the value of my property. Does anyone know if First Direct consider lending more than 3.5 x salary for lower LTV cases?

Martinslovechild

I'm not sure I follow. You want to lend 50% of the value of your property to somebody? Or do you wish to borrow 50% of the value of the property?

Regarding your second question, each bank has its own criteria. Some banks lend based on salary multiples (up to 5x in the case of certain banks), whilst others lend based on affordability (better for people whose income is smaller but outgoings are negligible so can afford more on their mortgage each month).

figgyroo

Apologies, my misuse of the english language. I meant I want to borrow 50% of the value of my house.

Martinslovechild

Ah, OK. In which case, you need to see what First Direct offer you. It's worth noting that each bank's rules are not written in stone meaning that although First Direct say that they will lend a maximum 3.5x salary, you may indeed find that they will offer you slightly more based on you having a 50% deposit. If they don't then you'll potentially need to shop around.

I don't know exactly to what extent the Credit Crunch has changed things in the mortgage marketplace over the past 6 months, but it would be fair to say that the banks will be more cautious about how much and to whom they lend money in the future than at this same time last year .

mrsm

We're currently re mortgaging with FD and were told that they do look at all cases individually. We were also told that whilst they do not count benefits such as Tax Credits towards the multiples they can be used when calculating affordability.

One tip, if you are interested in a certain deal make sure you tell them. Funds seem to run out very quickly for each deal, even before they call you back, but if you tell them you're interested in a particular deal they usually honour it even if its since been withdrawn.

brummybloke

when i contacted fd last month they in theory agreed x 4 over the phone and said for x 5 would go to the underwriter but again, in theory for my circumstances it would be do-able.

ixwood

They told me that they're more interested in the LTV and the income multiple is fairly flexible as long as you can afford it.

If the LTVs low, that means they're certain to get their money back if they have to repossess.

InMyDreams

We were offered x 3.95 and they didn't bat an eyelid. (We are also borrowing 50%). I said that I was worried about the multiple and that it might be turned down further down the line but was told it was only just over and as we had no other debts it wouldn't be a problem at all, even though we have three children (each child counting against you apparently). We are currently awaiting our legal docs and valuation to be carried out. (Hopefully next week.)

figgyroo

Thanks to everyone for their help. First Direct got in touch yesterday and said they could consider up to 4.5 x salary, however, as they said applications are currently taking 8-10 weeks to process I have decided to go with the Halifax, to avoid paying my current lender's SVR of 7.5%.

Gambler

They agreed 4 times for me and my LTV is 56%.

They wont include tax credits or maintenance payments unless via court order.

Also wouldn't include overtime or bonuses.