Current mortgage multiples??

[matttr6]

Currently thinking about making the jump onto the property ladder. Anyone on here taken a mortgage out recently and can give me an idea on what current multiples are? (will be joint with the girlfriend)

Also, we looked at a new build where the developer gives you an interest free loan of 15% of the houses value which is then paid off over 10 years. Any thoughts on this ? (developer is Bloorhomes if anyone wants to google it)

As for us, gross pay is about £37k, both have top credit ratings with no outstanding debts and approx £20-25k deposit.

[scotal]

Have you ever had any debt? Never having had any can be as bad as having too much... weird sint it.
Are you on the electoral role? If you are then fine, the lnders should be able to find some record of you, if not, get on the ER now.

Be careful of interest free loans on new build, this can count against you from the lenders point of view. Is that loan unsecured? How will they enforce it if you don't pay?

20-25k deposit equates to how much in %age terms of the purchase? The loan to value will affect your affordabilty.

In truth 4x joint inocme should be easily done, up to 5x isnt unheard of, and score dependent 6x is possible, but it all comes down to creit score, and although all the lenders use experian or equifax, they might use a different measure than that used by experian themselves.

[matttr6]

Thanks for the reply. Yes I've had plenty of loans in the past, never missed any payments. Also use credit card, again never missing a payment. GF hasn't had quite so much loans but has and uses a credit card. As I said, we both have top credit marks from Experien.

The Electoral roll is a bit of a concern as she doesn't think she's on it!! Any advice??

As for the developers loan, I'm very sceptical. I can see why its there (giving those with a low deposit a help I assume) but it'll be a lot of money to pay off- house is £186k so 15% is about £28k. I really need to look into that, esp the small print.

[scotal]

matttr6 said:

The Electoral roll is a bit of a concern as she doesn't think she's on it!! Any advice??

Is she at home, or does she rent somewhere? Eitehr way she should check with her local authority, and register herself asap. (If she is living with someone who is currently clasiming the 25% discount for them living alone they will just have to suck it up)

Does the developer stipulate you use their mortgage people to qualify for the loan? If not you might like to check what various lenders think about the size of the loan prior to signing up for anything (of course an interest free loanis better than an interest bearing one, but if it works agianst you getting the house it might royally screw things for you.

[SGirl]

matttr6 said:

Currently thinking about making the jump onto the property ladder. Anyone on here taken a mortgage out recently and can give me an idea on what current multiples are? (will be joint with the girlfriend)

Just about to take out a mortgage with First Direct. They're offering 3.5 times the main salary plus 1.5 times the second salary.

HTH.

[matttr6]

scotal said:

matttr6 said:

The Electoral roll is a bit of a concern as she doesn't think she's on it!! Any advice??

Is she at home, or does she rent somewhere? Eitehr way she should check with her local authority, and register herself asap. (If she is living with someone who is currently clasiming the 25% discount for them living alone they will just have to suck it up)

Does the developer stipulate you use their mortgage people to qualify for the loan? If not you might like to check what various lenders think about the size of the loan prior to signing up for anything (of course an interest free loanis better than an interest bearing one, but if it works agianst you getting the house it might royally screw things for you.

Scotal, we're both currently living with parents to try an save more deposit.

The developer gives us a financial advisor to use and I'd imagine we'd be tied in to some kind of lender although we haven't got to that stage yet. To be honest, I'm against the developers loan and would rather go with a bigger mortgage but I'm sure we can't borrow that much. Just to put it into context, I'm 31 shes 28 so a small apartment/ house really isn't that suitable hence why we're looking a 3 bedroom places.

As for %deposit at most it'll be 15% (this is the southwest, home of low wages/ high houseprices!!) Obv if we take on the developers loan, mortgage will be less but we'll need to fix a scheme to pay back the loan.

Edited by matttr6 on Monday 5th October 17:46

[matttr6]

SGirl said:

matttr6 said:

Currently thinking about making the jump onto the property ladder. Anyone on here taken a mortgage out recently and can give me an idea on what current multiples are? (will be joint with the girlfriend)

Just about to take out a mortgage with First Direct. They're offering 3.5 times the main salary plus 1.5 times the second salary.

HTH.

Interesting, unfortunately that wont buy a caravan down here!!

[Vron]

Woolwich have offered me 3.5 x basic salary - will not consider any bonuses. I have a deposit of about 80% value of properties I am looking to buy. I am tied into the Woolwich because I want to port the balance of my existing mortgage with them of Base + 0.17.

[scotal]

Vron said:

Woolwich have offered me 3.5 x basic salary - will not consider any bonuses. I have a deposit of about 80% value of properties I am looking to buy. I am tied into the Woolwich because I want to port the balance of my existing mortgage with them of Base + 0.17.

How odd, do you have other debt? Are your bonuses more than your income?

They are usually more generous than that. (Not that you could beat the +0.17 deal away form them, that just seems a bit tight for them to me.

[Vron]

No no other debt. Bonus is paid at 40% of basic salary. They are probably offering me a crap deal to get me to move to another lender so they can cancel my mortgage at base = 0.17%

I don't need to borrow any more than 3 times my salary at the extreme anyway. I have never borrowed upto the maximum limit just because its available - but with hindsight I wish I had now with my current mortgage rate.

[scotal]

I'm guessing you've been overpaying for the last year? You should be able to borrow that back at 0.17 over, it will take a bit of pushing on that though.

[Vron]

Yes I've got my overpayments back so given me a little more to play with at +0.17

[matttr6]

anonymous said:

[redacted]

I had thought of that, but I can't see it happening as they're having no problems shifting them.

If I'm honest, its out of our budget but we went to see it and she fell for it!!! Just trying to persuade her to drop the sights a little and look at 2 bedroom places!

[Gareth79]

Gifted deposit will be looked upon by the lender as a discount (it's done to prop up the sale values), and will most likely mean the lender will adjust the valuation, possibly by the whole amount.

Lending will be up to 4.5x basic salary, less any other debt repayments.

Edited by Gareth79 on Monday 5th October 20:26

[matttr6]

Gareth79 said:

Gifted deposit will be looked upon by the lender as a discount (it's done to prop up the sale values), and will most likely mean the lender will adjust the valuation, possibly by the whole amount.

And that means???

[Gareth79]

matttr6 said:

Gareth79 said:

Gifted deposit will be looked upon by the lender as a discount (it's done to prop up the sale values), and will most likely mean the lender will adjust the valuation, possibly by the whole amount.

And that means???

If the house is priced at £200k, the valuation could come in at £170k. Basically some just don't want to lend using the gifted deposit schemes because it means the borrower essentially ends up with a 100% mortgage.

Edit: here's a recent example from MSE: http://forums.moneysavingexpert.com/showthread.htm...

It's not guaranteed to happen, but be prepared and figure out who can make up the difference, and whether you think the bank is being overly cautious.

Edited by Gareth79 on Monday 5th October 20:31

[Vron]

Lenders are being very 'lean' on their valuations at the moment especially for new builds.

[matttr6]

Well reading through all that has definately put me off buying a new build!! And put me off any developers schemes!!

I'll have to discuss things further with the GF.

[Gareth79]

New builds do mean that the lender will look very closely at the valuations, but it's quite possible you can get a realistic price. The reason they don't want to discount too much is that in a few months time it will be tricky to sell and identical house with a lower price on the Land Registry.

It is a pain trawling estate agents, but with Rightmove etc. even in the thin market today you can get a list of a dozen houses to enquire about. I am pretty sure that if you can accept that not everything will be perfect about an old house then you will find something better in every aspect than a new build.

edit: I would agree about going independant for the finance stuff, or at the very least do a lot of reading so you understand everything yourself. The MoneySavingExpert site is a good place to start, and when you get something planned you could do worse than post all the details there for people to pick over (or here). Regardless of what you are buying people will always try and rush you, so it's good to have things like the mortgage and a solicitor planned ahead so that you can deal with the buying process without being rushed.

I am just about to complete on a house, I started looking back in June, but I have been very open-minded and just waiting for the right place to come along. I viewed about 3-4 places I could happily have bought (I made offers on about half those I viewed), but they were all a bit more than I thought they were worth to me.

Edited by Gareth79 on Monday 5th October 22:50

[matttr6]

anonymous said:

[redacted]

Tonker, might have come across wrong but this is very early stages. Not realy looking to buy till early/ middle of next year. Just that this new build started locally so thought we'd have a look. And we're seeing a mortgage advisor on wednesday to get an idea of what figure we can look around.