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Who gives a 5 times salary mortgage?

245

Comments

  • meanmachine_2
    meanmachine_2 Posts: 2,624
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    Sorry, I wasn't attacking you personally.

    And I would have "thanked" you had you included the warning about repossession in your first post.

    EDIT: By the way, interest rates have been updated on the A&L website and yet, bizarrely, based on their affordability calculations, they're prepared to lend me the SAME money as before the IR hike.

    I must be missing something.

    Just goes to show that "affordability" is a total sham.

    Next mis-selling scandal here we come...
  • nelly_2
    nelly_2 Posts: 17,863
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    Jesus christ half your wages for the next 25 years?

    I rather develope a Crack habit, what sort of moron does that to themselves?
  • AndrewSmith
    AndrewSmith Posts: 2,871 Forumite
    Sorry, I wasn't attacking you personally.

    And I would have "thanked" you had you included the warning about repossession in your first post.

    EDIT: By the way, interest rates have been updated on the A&L website and yet, bizarrely, based on their affordability calculations, they're prepared to lend me the SAME money as before the IR hike.

    I must be missing something.

    Just goes to show that "affordability" is a total sham.

    Next mis-selling scandal here we come...


    I though as much :beer:

    You know my thoughts on over borrowing and the way I publicly slate the Northern Rock Muppet Mortgage 125%.

    I agree that affordability and +100% borrowing is going to end up as the next big mis-sale venture. Best start training in law now to earn a killing from it.
  • AndrewSmith
    AndrewSmith Posts: 2,871 Forumite
    nelly wrote:
    Jesus christ half your wages for the next 25 years?

    I rather develope a Crack habit, what sort of moron does that to themselves?


    There are some who ask for it, trust me.

    In Adviser mode I would tell the potential client to wait until they are in a position to afford it more easily.

    The trouble with a forum such as this is that the why's and how's cannot be explained hence the fact I simply give the answers to questions posted.

    Doesn't necessarily mean that I personally agree with the lending principle. Hence my signature.
  • Debt_Free_Chick
    Debt_Free_Chick Posts: 13,276
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    Sorry, I wasn't attacking you personally.

    And I would have "thanked" you had you included the warning about repossession in your first post.

    I, too, often struggle with "how" to respond to a question. Do I simply answer the question asked .... or do I add anything else.

    It's a difficult balancing act. Sometimes if we add other comments that seem relevant, the thread goes off-topic and can develop into a bit of a rant :D No basic problem with a debate, but it can be difficult for others who simply want to find a simple answer to a straightforward question.

    Andrew Smith gives very sound advice (in the helpful, generic sense of the word, not muddled by the statutory definition) and would not, IMHO, deliberately hide something relevant.

    I'm sure you're not suggesting we should all mention the dangers of repossession in every post about a mortgage ;)

    Regards
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • Milky_Mocha
    Milky_Mocha Posts: 1,060
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    Lots of useful replies, thanks so much.

    I didn't realise the rates on 5x salary mortgages are rubbish. I thought that so long as my credit rating is good the rate should be good.

    Debt_free_chick: If you're not married and you want the property to be jointly owned or a tenants in common, you will almost certainly need a joint mortgage. If the property is to be registered in your name only, then only you need a mortgage.

    Ownership & mortgages go pretty much hand-in-hand.


    Sorry I didn't make it clear but we are married. We would want the property registered in my name only hence the need for 5x my salary.

    Realwildone: It is utter madness to get 5x salary mortgage. The reason they give it to professionals like doctors is that they are unlikely to fall on hard times. If you fall on hard times with a 5x mortgage you really are in trouble.

    If it was going to be me solely paying the mortgage then yes I think it would be a crazy idea but as it is would be both of us repaying there would not be as much of a 'struggle' if one of us was to fall on hard times.

    mi-key: Also remember that if you and your OH are currently living together, then your credit rating will already be a joint one, so leaving him off wont make any difference.

    We live together but none of our finances/ credit records are joint. I believe a new rule came into force about 10 months ago protecting ppl's credit rating from the adverse ratings of fellow housemates. Besides, his finances are recorded at our other house just to be doubly sure.

    I don't know about whether the lender will view my affordability situation favourably. Would it be a good idea for me to tell them why I want the 5x salary? Should I post some figures so that you can give your opinions on how good my 'affordability' factor is?

    I want to be as prepared as possible before making an apponitment with a (whole of market) broker.

    Replies much appreciated.
    The reason people don't move right down inside the carriage is that there's nothing to hold onto when you're in the middle.
  • Arch-Angel
    Arch-Angel Posts: 184 Forumite

    If it was going to be me solely paying the mortgage then yes I think it would be a crazy idea but as it is would be both of us repaying there would not be as much of a 'struggle' if one of us was to fall on hard times.

    Can't say I know much about mortages - but if you're both going to be paying the mortgage, why are you not getting a joint mortgage? This would bring the income multiple down, creating (I assume) more options for mortgage products. You're going to ultimately borrow the same amount and you and OH are paying it - why worry about getting a single mortage with a high income multiple?
    Never attach your ego to your position....
  • Milky_Mocha
    Milky_Mocha Posts: 1,060
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    Arch-Angel wrote:
    Can't say I know much about mortages - but if you're both going to be paying the mortgage, why are you not getting a joint mortgage? This would bring the income multiple down, creating (I assume) more options for mortgage products. You're going to ultimately borrow the same amount and you and OH are paying it - why worry about getting a single mortage with a high income multiple?

    I am worried that with my o/h's credit rating being so bad we might not be given a mortgage in joint names. (or the rate might be v. bad). Also, his rating would tarnish mine, which would bring an end to my 0% credit card offers etc.
    The reason people don't move right down inside the carriage is that there's nothing to hold onto when you're in the middle.
  • nelly_2
    nelly_2 Posts: 17,863
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    I, too, often struggle with "how" to respond to a question. Do I simply answer the question asked .... or do I add anything else.


    Regards
    I'd say answer the question,
    then add
    "but in my opinion"

    then pass on your advice

    I wasnt adviseing starting a crack habit, but its what I'd do :rotfl:
  • real1314
    real1314 Posts: 4,432 Forumite
    nelly wrote:
    Jesus christ half your wages for the next 25 years?

    I rather develope a Crack habit, what sort of moron does that to themselves?


    After 12 years, based on wage increases of 3% a £25k salary becomes £35.6k

    If you were sepnding half your £25k take home pay (so about £9500pa mortage) at the start, it would be about 37% after 12 years.

    If inflation/wage rises were higher the percentage would diminish even faster but subject to higher mortgage payments.

    In many ways it's a myth that low interest rates are good for home buyers, although a rate of 10% would make payments high at the start, they soon become a small fraction of what they were.

    a £25k salary would be £78,460 after 12 years at 10% annual rises.
    The mortgage payments would have been twice as much at the start (compared to current rates) but the payments don't go up with inlaftion like most other things do. (after 25 years the salary would be about £270k!!)
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