How do you know what price range to look in when you aren't sure what you can borrow?

(23 Posts)
CrapBag Thu 05-Jun-14 18:56:58

We were told provisionally how much we could borrow. At the application stage (with Nationwide, have a thread about this grin) it isn't anywhere near what they said.

Now we are likely to pull out of our purchase, which was ridiculously cheap, and we need to start again. I have no idea what price brackets we can look in though. We have a significant deposit and we were going on what Nationwide said we could potentially borrow before, but now they wouldn't go anywhere near that amount (and I have since found out from here that they are notoriously strict) I don't know what sort of budget to look at. I don't want to fall in love with something, offer etc then it to fall apart at the application stage.

Sheldonswhiteboard Thu 05-Jun-14 19:00:05

Nationwide have a reputation for being quite conservative, even before the introduction of the MMR. I'd suggest approaching a mortgage broker and asking them, they will have more of a feel for what lenders would offer and then take it from there.

Clargo55 Thu 05-Jun-14 19:04:37

Try a few online mortgage calculators, we found Santander very accurate to what they would lend.

We also had an in-branch affordability check with Natwest and thy were really helpful.

CrapBag Thu 05-Jun-14 20:03:39

Thanks.

Tried both, vastly different! Would hope Natwest was the more likely one. Santander was shockingly low!

Clargo55 Thu 05-Jun-14 20:06:08

That's a pain, from your other threads it seems you have a good deposit. Santander are lending us nearly 5 times our salaries. Think that's quite generous.

FishWithABicycle Thu 05-Jun-14 20:09:29

do places not do agreement-in-principle things any more? I've not had to engage with the mortgage market since the new rules came in but you used to be able to put in an application without having found a house yet and get a general agreement that they would lend you up to £X so long as the LTV wasn't more than Y% - then you could go off househunting and the offer wouild be valid usually for 6 months. Do those not exist any more?

Clargo55 Thu 05-Jun-14 20:11:22

Nope they have changed the rules, you have to find the house first. Very recent change as our buyers have a 6 month MIP thing before offering on our house.

TheresLotsOfFarmyardAnimals Thu 05-Jun-14 20:12:43

Call London & country and let them do it for you for free! They were fab with us.

TheresLotsOfFarmyardAnimals Thu 05-Jun-14 20:13:34

They're a whole of market broker by the way

Get an independent mortgage advisor. They'll search the whole market for the best deal for you

orangepudding Thu 05-Jun-14 20:15:19

I agree with asking a broker.

We got a mortgage from Nationwide at the end of last year. Just did the mortgage calculator online and they would lend us less now than last year. We didn't borrow the max amount but it's interesting to see the difference.

CrapBag Thu 05-Jun-14 20:18:39

We had a mortgage in principle a couple of months ago, agreed for 45k. Application stage they said no and would only lend £34900.

Clargo that would be great. When I done the online calculator with Santander, it wasn't even twice DH's wages!

There have been a few mentions of London and Country. Think I will give them a ring tomorrow. Thanks.

TheresLotsOfFarmyardAnimals Thu 05-Jun-14 20:24:03

I'm pretty sure they're still open.

The aip will be based on earnings but not outgoings. Can you reduce your outgoings at all?

ClariceBeanthatsme Thu 05-Jun-14 20:24:58

Agree you need an independent mortgage advisor who can search for the best deal for you. Although some can check only certain lenders so do ask if they are whole of market.

We simply told ours what we in an ideal world would like to borrow and he got it!

They will know where to go and who is most likely to lend depending on your individual situation. For example I was on maternity leave whist applying for the mortgage and our broker knew exactly who wouldn't touch us and who would.

It will save you lots of time and stress just leave it to them.
Good luck smile

London and country couldn't help me. They aren't good if you're self employed

3boys3dogshelp Thu 05-Jun-14 20:32:58

We used London and country a while ago and they were brilliant. They gave us loads of advice then told us to go back to our original lender with their figures. So we got a fab deal and they did themselves out of their comission.

couldbeanyone Thu 05-Jun-14 20:41:53

Another vote for London and country who couldn't be more helpful, and make it do easy as they deal with all the paperwork as well as working out the figures for you. Just used them for the second time for a remortgage. We ended up with a deal with our existing lender but l&c dealt with it all and it was a lot easier than dealing with the lender direct (who couldn't give us a phone appointment for over a week when I first rang - all we did was a rate switch!) l&c had the whole thing done and dusted within 2 weeks!!

CrapBag Fri 06-Jun-14 15:25:12

I did phone London and Country and yes they were very helpful.

Unfortunately we still can't borrow what we were hoping to but it is more than Nationwide are willing to lend. So now we need to decide what we are going to do.

MillyMollyMama Fri 06-Jun-14 15:34:23

I think it is best to work out what you can actually afford. Five times both salaries means both partners working unless one gets a massive pay rise. When we took out our first mortgage the standard loan was 3 times first salary and 1\2 times secondary salary. We still had a life! We never worried about money! Pushing for the highest can be more worry than its worth. DH has been self employed for many years and you must build in times when the money coming in is less and that interest rates may well rise later this year.

CrapBag Fri 06-Jun-14 15:41:05

We can easily afford more than what they are saying, that's why we are so frustrated.

We were paying £425 rent and mortgage combined (shared ownership) and when we asked to borrow 45k the payments were £218 a month and they are saying we can't afford it!! We know we can and overpay as we have been paying double that we no problems, and saving and the kids still get to do their activities but they are just saying no.

These new rules are OTT now I think. They don't seem to be taking actual circumstances and actual living costs into account at all.

Sheldonswhiteboard Sat 07-Jun-14 22:48:36

The trouble is they also stress test the repayments at higher rates and maybe they are concluding that you can't afford them should interest rates rise. I've heard that they assume an interest rate of 7%, if they are also making assumptions about your expenditure rather than basing it on your actual figures this may explain why they are limiting their offer.

CrapBag Sun 08-Jun-14 20:04:21

When I have calculated what we can afford, I always do a higher rate as well so I know that we can still afford it when the rates go up, although I usually do 5% not 7%. It always comes out fine. It will be a long time before the rates are 7% so that seems ridiculous.

Sheldonswhiteboard Sun 08-Jun-14 20:25:22

SVR's are currently around 4 -5%, long term interest rates have been around 7%, the BOE has indicated that rates are likely to rise starting next year and lenders tend to raise their own rates more than the base rate so I don't think 7% over the term of a mortgage is that daft an assumption. I do think these changes will restrict mortgage availability so will lead to falls in house prices which will allow more to buy. Anecdotally I have heard that outside prime London areas the heat is starting to come out of the market.

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