Would you give me a mortgage at these figures?

[Wouldyougivemeamortgage]

I've got a telephone appointment with a mortgage advisor this evening but I don't want to waste their time if I've not got a cat in hells chance. Here's my situation, does anyone have any experience in mortgages and would I have any luck at buying the house I'm looking at which is £160k.

Earn £32000 per year on PAYE
Plus around £10000 self employed income (only last 12 months no accounts)
Deposit of £10000
Car finance agreement £250 per month
Loan which I'm overpaying, have about £7300 left on it at a min payment of £200 per month, hope to pay off in 2 years.
No other debt and very good credit rating.

Anyone have any advice?

Nobody on mumsnet is going to give you better advice than the mortgage broker. The whole point of a mortgage broker is for them to assess your specific circumstances and consider what mortgages might be available to you. Don’t let advice from mumsnet that you most likely can’t trust put you off talking to the person who can actually help you here.

Most banks seem to be doing 85% and under mortgages at the mo, so I'd work on bolstering your deposit. This may change though.

You need to find a way to boost your deposit to at least 10 percent, if not more if you can as 10 percent products are thin on the ground at the moment but will hopefully open up again soon. You could think about borrowing some money from a friend or relative and paying back after house purchase (think along of the lines of telling the mortgage advisor it is a debt repayment or even if not stretching the truth, that you have invoiced in advance, or if from a close family member that it is a gifted deposit) if you are in a rush. Rmemeber, the mortgage broker wants to sell you a mortgage and the lenders want to use a mortgage broker because they assess and take on the risk.
You are very nearly there, best of luck.

I don’t think so I’m sorry,

You’re looking for a 150k mortgage, right? On what will only be 32 k a year that they take into account, so nearly five times your salary, at best you can hope for 4 times. So I think you need a higher deposit.

You need a mortgage advisor, on the surface of it then your income is probably fine for that size of mortgage but your deposit is low, I'm not sure what lenders maximum lending rates are these days. You need a mortgage advisor.

Ah the loan. I missed that. That isn't great tbh but your mortgage advisor will advise.

My understanding is that 90% and above LTV mortgages (those where you have a 10% or less deposit) are thin on the ground at the moment - so in most cases you’d need at least double the deposit you currently have. (Plus a couple of additional thousand for legal fees etc)

Lenders are also only legally allowed to offer you 4.5 times your annual salary - so £32,000 still wouldn’t quite get you there unless you had an even larger deposit. Your existing debts will lower the amount they’ll lend you further still although different lenders have different approaches.

Could you look at shared ownership? Is £160K the cheapest property out there?

You can just plug your details in to any of the mortgage calculators online op. Takes 2 minutes.

At the moment you need a least a 24k deposit.

We have recently purchased our first house. Literally moved in weeks before lockdown. Even then with us being FTB we had to boost our deposit up to 10%. The amount of mortgages and lenders vastly increases then.

www.halifax.co.uk/mortgages/mortgage-calculator/calculator/

I always use this as a rough guide... you do need to up the deposit as pp have said. Good luck!

You need to try and top up that deposit. And perhaps wait until you have some accounts for the self-employed income as that will give you more headroom on the lending side.

Have you thought about help to buy or shared ownership?

Nope. I don’t think they’d lend you more than about £100k on those figures, sorry

I think the maximum rate would be 4.5x salary, less "affordability criteria" aka loan costs and car payments. Assuming you're looking for a £150k mortgage, you need a 95% mortgage which is harder to come by in the first place and then for them to give you a mortgage 5x the income you have evidence for.

It might be possible but I wouldn't say it's very likely. Your best bet here is probably to go and look at the Money Saving Expert site. They have good forums on house buying and debt repayments, and useful pages about mortgages.

Normal maximum is 4.5x income (some will offer more, but your deposit will be an issue for those). So even without the debt repayments it would be a stretch for most mainstream lenders until they take SE income into account. But your mortgage broker will know the market and a good one will have access to more specialist products so it’s definitely worth talking to them.

I can't make that work, even based on lending practices from 20 years ago.
I can't see them taking the self-employed income into account, although it could be used to cancel out the loan repayments.
We used to do 4 x main income with a 25% deposit. But that still only gets you to 128,000 and you don't have enough deposit.
The mortgage broker is absolutely the best person to advise you as they will know what lenders are offering at the moment. I'll think you're going to need a bigger deposit and to look at a smaller property though.

Mortgage lenders can be a pain in the neck as well - mine required my credit card (paid off monthly, only items >£100 on there, for s75 protection, about £300 total) was paid off prior to completion for mine. Not an issue as I pay it off every month anyway but was just another thing to faff around with and perhaps gives an idea of how fussy they can be.

I spoke to my mortgage company recently to remortage to get some work done we didnt even go through affordability they were only doing 60% ltv mortgages. I needed 85% so she told me to phone back in a few weeks. Usual circumstances i think you would be okay with that. Now i doubt it.

Sorry but that’s unlikely as other poster said you don’t have the income, only your main income will count so even at 5x 32k you are still barely there. At 10k deposit you would need a 95% mortgage which are not available as far as l am aware.
Is the debt on a credit card? Or student loan?
If cc you need to prioritise paying it off really fast, student loan not really.
Start getting your small business to ncome verified by an accountant let him do your tax return then you will be able to show that, you will need 2 years usually. That would really make a difference.
Good luck

In the money pages of this weekend's papers, there was a piece about the potential impact of Covid on the housing market.

It seems that price falls are widely expected and it went on to say that a lot of lenders were no longer offering 90% mortgages. Banks are going to be very cautious after catching a cold with negative equity in the early 90s and again after the global crash.

Your £10k deposit is nearer 5% than 10%, so if there's any truth at all in the article I read, I think you'll struggle. Your self-employed income is pretty irrelevant without accounts and you don't say if you've got anything put aside for the tax on that.

I think you need a bigger deposit and less debt. A £150k mortgage is nearly 5x your gross income (disregarding the SE income) and you haven't been able to clear the loan you have.

If I was a bank (sadly I'm not lol) I'd think you were a high risk. You may have a chance if you have a very secure job and can show that you're managing to save regularly while paying rent which is more than your mortgage payments would be.

On top of that i think you would need 10% depsit anyway.

I'd say you have a chance, but is there any chance you could bump your deposit up to a 10% deposit?

Agree with many others, you need to up your deposit to 10%, which is what many banks are offering at the moment (looked recently and at least 3 are). Then it's usually 4 x income at the moment, so it depends what they do about the self employed proportion. Best to speak to the advisor as they will probably be very helpful to you at the moment.

You also need to factor in solicitors fees, moving costs etc and it would be good if you still had some other savings set aside for emergencies etc. It's not good to have a hefty mortgage and no savings

Your self employed income won't be used if you've not yet filed a tax return, lenders are keen to only lend based on standard PAYE salary currently, most are disregarding bonus and overtime.

4.5x salary is absolute maximum borrowing and that's without debts.

There's only a handful of lenders with 90% products at the money. I don't know of any with 95% products. You need to focus on getting 10% deposit PLUS money for fees and stamp duty saved, at least £2500.

I think you'd be better waiting a year and hammering the loan and saving like a demon. You'll also then have 2 years self employed history which will bolster affordability.