Mortgage advisors/brokers - how much can I borrow?

44
Posted 9th Jul
We have about 100k equity in the flat. We would like to move areas and buy a property for 300k using the 100k equity.

What would our joint earnings need to be to achieve that 200k mortgage?

I have tried all the online calculators but they are all very conservative and I have have borrowed 200k around 5 years ago with a joint salary of £48-£50k. Deposit was only 50k then though..

25-35 year mortgage is fine.

I would really appreciate any advice.
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You’ve got a loan to value of 67%, if you are not 65/70 by the time 35 years is up I don’t think you will have much trouble. My ltv is lower I’ve just gone through the process borrowing a similar amountno issue.
Dannyrobbo09/07/2020 15:23

You’ve got a loan to value of 67%, if you are not 65/70 by the time 35 y …You’ve got a loan to value of 67%, if you are not 65/70 by the time 35 years is up I don’t think you will have much trouble. My ltv is lower I’ve just gone through the process borrowing a similar amountno issue.



I’m worried about salary coming in to it though. I could probably bump to 60% but still feel we will come unstuck if joint earnings are only 40-45k
Have you tried santander? they were the ones who would give us the most.

Joint salary of just over 55k and they would give us up to 290k
A lot of companies use affordability rather than multipliers these days
winifer09/07/2020 16:12

Have you tried santander? they were the ones who would give us the …Have you tried santander? they were the ones who would give us the most.Joint salary of just over 55k and they would give us up to 290k



Wow! Over x5 salary. That's great.
7ommy.7809/07/2020 16:33

A lot of companies use affordability rather than multipliers these days


Yeah that’s right. They’ll use income multipliers as a cap but will work of net income affordability in general
As a broker I would say that HSBC seem to be one of the most generous at the moment. Have a go of their online calculator. Let me know if any help needed
Nationwide online calculator is pretty detailed takes into consideration your spending etc and pretty accurate.
Don't forget if you've got kids they reduce 25k per child AFAIK!
201509/07/2020 16:05

I’m worried about salary coming in to it though. I could probably bump to 6 …I’m worried about salary coming in to it though. I could probably bump to 60% but still feel we will come unstuck if joint earnings are only 40-45k



honestly I don’t think you’d struggle getting one, given your equity and the fact if you can’t afford it In the future they’d just take the house and suck up the equity you’d put to it on top of recouping the money borrowed It would be easy money either way. You are low risk, have a good LTV, in my opinion you’d have no issue but it’s probably worth seeing an adviser because they’d be able to work with what you have on affordability or tell you nobody would lend you that amount unless you can meet this...

out on interest did you try the lenders calculators (Santander/tsb etc) how did you fair on those?
Edited by: "Dannyrobbo" 9th Jul
Sorry I should have maybe made that a bit more clearer after reading it back.

The example of borrowing 200k with 50k deposit and joint earnings of 48-50k was a different time. Not the same mortgage and we don’t have those earnings now.

Earnings are half that currently which is why Im asking the question. Assume 25k isn’t enough obviously but would 40k joint be enough or how do I find out. We kind of need to know how much we need to be earning as we are looking for a job.

All the lenders calculators that I’ve tried literally just multiply by 4.5 or 3.5 if it’s joint.
Dannyrobbo09/07/2020 18:45

honestly I don’t think you’d struggle getting one, given your equity and th …honestly I don’t think you’d struggle getting one, given your equity and the fact if you can’t afford it In the future they’d just take the house and suck up the equity you’d put to it on top of recouping the money borrowed It would be easy money either way. You are low risk, have a good LTV, in my opinion you’d have no issue but it’s probably worth seeing an adviser because they’d be able to work with what you have on affordability or tell you nobody would lend you that amount unless you can meet this...out on interest did you try the lenders calculators (Santander/tsb etc) how did you fair on those?



Santander as an example only do 4.5x single or 3.5x joint your salary. No one actually seems to take in to consideration you’re giving them 100k to balance out the risk
AMaky09/07/2020 17:19

Nationwide online calculator is pretty detailed takes into consideration …Nationwide online calculator is pretty detailed takes into consideration your spending etc and pretty accurate.



But does it just use the same multiplier
nicholasgatti09/07/2020 17:09

As a broker I would say that HSBC seem to be one of the most generous at …As a broker I would say that HSBC seem to be one of the most generous at the moment. Have a go of their online calculator. Let me know if any help needed



As a broker is it really a case of 3.5 or 4.5x. Would no one take into account the 100k deposit? I read that a few lenders have a 10% of total mortgage the give out leeway. So in those 10% of cases they can bend the rules a bit more. Is that true?
nicholasgatti09/07/2020 17:02

Yeah that’s right. They’ll use income multipliers as a cap but will work of …Yeah that’s right. They’ll use income multipliers as a cap but will work of net income affordability in general


This is what I can’t get my head around. If the multiplier is the cap and then might get reduced on affordability it just seems backwards. Because the cap of how much they lend is the same no matter if you stick down 10k deposit or 100k deposit.

They can’t seriously expect someone earning 30k to be lent x4.5 so 135k when it’s £250k to buy a flat in southeast. Where are people pulling the £115k deposits out from as first time buyers.
7ommy.7809/07/2020 16:33

A lot of companies use affordability rather than multipliers these days



I would love to know the ones.

A 300k mortgage with 100k deposit fixed for 5 years is £823. If that’s half someone’s wage you’d think that’s safe enough to offer the mortgage.

But by going by the calculators that same person would only be offered 26k x 4.5 which is £115,700 a long way off £200k

(£1050 after 5 years without remortgaging)
201509/07/2020 20:23

But does it just use the same multiplier


Nationwide looks at your dependents, your costs like childcare, existing debts etc and decides your affordability based on what’s left over.
shelliebish09/07/2020 20:46

Nationwide looks at your dependents, your costs like childcare, existing …Nationwide looks at your dependents, your costs like childcare, existing debts etc and decides your affordability based on what’s left over.



But do they do that after doing the multiplier? Or have they got rid of the multiplayer method.

Most lenders seem to do the salary multiplier and the decrease it further after expenses.
201509/07/2020 21:03

But do they do that after doing the multiplier? Or have they got rid of …But do they do that after doing the multiplier? Or have they got rid of the multiplayer method. Most lenders seem to do the salary multiplier and the decrease it further after expenses.



I saw an advisor and they used all my information within a system that spat out lenders who would take my application. It was income, outgoings (like car loans), credit card balances, childcare, dependants...etc

it’s their job to get you a loan at the end of the day it’s worth a visit you likely won’t pay a penny if they are unable and tbh most of the time their fees are covered by the mortgage company why you eventually go with
7ommy.7809/07/2020 16:33

A lot of companies use affordability rather than multipliers these days


Basically this.

@2015

I advise on mortgages for a living, not whole of market so I won’t be offering any guidance or advice via this platform in any shape or form - no mortgage advisor worth their salt would offer advice on tightly regulated products on here anyway. But what I will say is that I don’t think you should put so much focus on salary multiples - it’s a very crude way of looking at possible financing (this is by and large one of the first questions I’m ever asked by clients). Yes, whilst there is overarching max lending policy in the background (will of course vary between lenders) everything is determined by affordability these days post MMR and is pretty much dictated by the FCA.

In other words, historically I’ve had clients come to me earning X, which accounted X poss lending based on X multiples, but people’s finances can be otherwise be out of control, or there might be cause for concern around credit reporting, or there might be general concerns around job stability or a person’s ability to repay, or a multitude of other factors that might prevent a loan from actually being signed off. I honestly would just park these thoughts and speak to a few lenders directly.
201509/07/2020 20:28

This is what I can’t get my head around. If the multiplier is the cap and t …This is what I can’t get my head around. If the multiplier is the cap and then might get reduced on affordability it just seems backwards. Because the cap of how much they lend is the same no matter if you stick down 10k deposit or 100k deposit. They can’t seriously expect someone earning 30k to be lent x4.5 so 135k when it’s £250k to buy a flat in southeast. Where are people pulling the £115k deposits out from as first time buyers.


banks are very cautious about lending these days. i do wonder myself where people are getting the money from when the mortgage levels are so low and properties are so expensive. a lot of people get money from their parents to help buy their first property.

the salary multiplier and affordability checks are done to work out how much you can borrow. then they see how much that is as loan to value measure, so if the mortgage figure is less than what you need to buy a new place, after you have released equity from your existing home, then you will have to find the money else where.
Edited by: "mutley1" 9th Jul
joeydeacon09/07/2020 22:42

Basically this.@2015 I advise on mortgages for a living, not whole of …Basically this.@2015 I advise on mortgages for a living, not whole of market so I won’t be offering any guidance or advice via this platform in any shape or form - no mortgage advisor worth their salt would offer advice on tightly regulated products on here anyway. But what I will say is that I don’t think you should put so much focus on salary multiples - it’s a very crude way of looking at possible financing (this is by and large one of the first questions I’m ever asked by clients). Yes, whilst there is overarching max lending policy in the background (will of course vary between lenders) everything is determined by affordability these days post MMR and is pretty much dictated by the FCA.In other words, historically I’ve had clients come to me earning X, which accounted X poss lending based on X multiples, but people’s finances can be otherwise be out of control, or there might be cause for concern around credit reporting, or there might be general concerns around job stability or a person’s ability to repay, or a multitude of other factors that might prevent a loan from actually being signed off. I honestly would just park these thoughts and speak to a few lenders directly.



You mean you have another job apart from posting Xbox deals???

Thanks for that advice. I suppose they are the ones who can answer the burning questions.
mutley109/07/2020 22:42

banks are very cautious about lending these days. i do wonder myself …banks are very cautious about lending these days. i do wonder myself where people are getting the money from when the mortgage levels are so low and properties are so expensive. a lot of people get money from their parents to help buy their first property.the salary multiplier and affordability checks are done to work out how much you can borrow. then they see how much that is as loan to value measure, so if the mortgage figure is less than what you need to buy a new place, after you have released equity from your existing home, then you will have to find the money else where.



It just seems to be heading that only a couple both earning 35k each can own a home. That method worked years ago but not with prices these days even willing to take a longer mortgage.

£800 mortgage based on 300k property 100k deposit is affordable for a couple with no kids. But the calculators are saying no.

Same property would be £1200 to rent though
201509/07/2020 23:08

You mean you have another job apart from posting Xbox deals??? You mean you have another job apart from posting Xbox deals??? Thanks for that advice. I suppose they are the ones who can answer the burning questions.


Well yes but haven’t been able to work for a few months now due to fighting the big C and the horrendous side effects treatment brings, but that’s for another day (don’t worry not looking for sympathy or anything, it is what it is).

But posting deals and the banter that comes with it does actually offer me a general release from it all and a sense of normality, if I’m honest. I’ve been locked away pretty much shielding for 4 months now.
Edited by: "joeydeacon" 9th Jul
201509/07/2020 23:12

It just seems to be heading that only a couple both earning 35k each can …It just seems to be heading that only a couple both earning 35k each can own a home. That method worked years ago but not with prices these days even willing to take a longer mortgage. £800 mortgage based on 300k property 100k deposit is affordable for a couple with no kids. But the calculators are saying no.Same property would be £1200 to rent though


when you look at London, it gets even worse as you both have to earn executive salaries to even afford a small flat!
joeydeacon09/07/2020 23:15

Well yes but haven’t been able to work for a few months now due to f …Well yes but haven’t been able to work for a few months now due to fighting the big C and the horrendous side effects treatment brings, but that’s for another day (don’t worry not looking for sympathy or anything, it is what it is).But posting deals and the banter that comes with it does actually offer me a general release from it all and a sense of normality, if I’m honest. I’ve been locked away pretty much shielding for 4 months now.



Well we are thankful for the deals Joey. I look forward to the Xbox ones every week. So thanks for that.

Wish you all the best with what’s going on.
mutley109/07/2020 23:52

when you look at London, it gets even worse as you both have to earn …when you look at London, it gets even worse as you both have to earn executive salaries to even afford a small flat!



I’m having this dilemma trying to move away from the place!
Just bear in mind that interest rates could rise substantially in the next few years, especially with the amount of quantative easing currently going on. Are you OK paying 5-7% interest on a 200k loan (£1200 per month and that's just the interest so more like £2500 per month on a 25 year repayment mortgage!)
nicholasgatti09/07/2020 17:09

As a broker I would say that HSBC seem to be one of the most generous at …As a broker I would say that HSBC seem to be one of the most generous at the moment. Have a go of their online calculator. Let me know if any help needed


Really? I have found them really strict when they look at affordability? We mortgaged with them 5/6 years ago.
ran123ran10/07/2020 07:22

Really? I have found them really strict when they look at affordability? …Really? I have found them really strict when they look at affordability? We mortgaged with them 5/6 years ago.


i don't have experience with hsbc mortage, but their internet arm, first direct, is pretty hopeless. they take very little risks when they lend out.
chocci10/07/2020 06:19

Just bear in mind that interest rates could rise substantially in the next …Just bear in mind that interest rates could rise substantially in the next few years, especially with the amount of quantative easing currently going on. Are you OK paying 5-7% interest on a 200k loan (£1200 per month and that's just the interest so more like £2500 per month on a 25 year repayment mortgage!)


i don't think interest rate is going up any time soon. this is the best time to borrow money as it can be borrowed so cheaply.

moneytothemasses.com/own…ise
201510/07/2020 00:48

I’m having this dilemma trying to move away from the place!


my advice is to stay where you are and buy some premium bonds
mutley110/07/2020 10:09

i don't think interest rate is going up any time soon. this is the best …i don't think interest rate is going up any time soon. this is the best time to borrow money as it can be borrowed so cheaply.https://moneytothemasses.com/owning-a-home/interest-rate-forecasts/latest-interest-rate-predictions-when-will-rates-rise


Not soon, but its coming. The bank of England can't keep making up money from thin air offering investors low interest rates.
chocci10/07/2020 20:25

Not soon, but its coming. The bank of England can't keep making up money …Not soon, but its coming. The bank of England can't keep making up money from thin air offering investors low interest rates.


i think we are going to end up in a real mess as i have no idea where they are getting all this money from that they are spending. there doesn't seem to be any details about how all this huge debt is going to be repaid. we will all end up bankrupt!
mutley110/07/2020 10:09

i don't think interest rate is going up any time soon. this is the best …i don't think interest rate is going up any time soon. this is the best time to borrow money as it can be borrowed so cheaply.https://moneytothemasses.com/owning-a-home/interest-rate-forecasts/latest-interest-rate-predictions-when-will-rates-rise


yes, all these seven and ten years mortgage deals at super cheap interest rates portray bank's more informed view that interest rates are not going up any time soon.
mutley110/07/2020 20:56

i think we are going to end up in a real mess as i have no idea where they …i think we are going to end up in a real mess as i have no idea where they are getting all this money from that they are spending. there doesn't seem to be any details about how all this huge debt is going to be repaid. we will all end up bankrupt!


It will be repaid by future generations in part. This debt is not supposed to be repaid fully ever - there is no money in it.
chocci10/07/2020 20:25

Not soon, but its coming. The bank of England can't keep making up money …Not soon, but its coming. The bank of England can't keep making up money from thin air offering investors low interest rates.


Why not?
pied_piper11/07/2020 11:33

yes, all these seven and ten years mortgage deals at super cheap interest …yes, all these seven and ten years mortgage deals at super cheap interest rates portray bank's more informed view that interest rates are not going up any time soon.


yes, the banks wouldn't offer fixed low rates for so long unless they are confident that interest rates will stay low for that duration. i think it will be a while before interest rates climb and even when they do, it will be a slow rise.
pied_piper11/07/2020 11:34

It will be repaid by future generations in part. This debt is not supposed …It will be repaid by future generations in part. This debt is not supposed to be repaid fully ever - there is no money in it.


i read we have more debt than the country's economy! i feel sorry for the future generations if they have to work to pay this back!

it reminds me of the old pyramid schemes where the fraudulent company takes everyone's savings and never pay them back, but just the interest until it all blows up and people demand their savings back, only to find out there is no money in the pot!

"Britain’s public debt is larger than the size of the country’s economy for the first time since 1963, after the government borrowed a record £55bn in May.

The total level of debt has risen by £173bn over the last year to reach £1.95tn, or 100.9% of GDP, as ministers introduced unprecedented support for businesses and households during the coronavirus crisis."
mutley111/07/2020 11:59

i read we have more debt than the country's economy! i feel sorry …i read we have more debt than the country's economy! i feel sorry for the future generations if they have to work to pay this back!it reminds me of the old pyramid schemes where the fraudulent company takes everyone's savings and never pay them back, but just the interest until it all blows up and people demand their savings back, only to find out there is no money in the pot! "Britain’s public debt is larger than the size of the country’s economy for the first time since 1963, after the government borrowed a record £55bn in May.The total level of debt has risen by £173bn over the last year to reach £1.95tn, or 100.9% of GDP, as ministers introduced unprecedented support for businesses and households during the coronavirus crisis."


Something similar happened when Govt refused to honour final pension salary schemes - no money left in the pot mate
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