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?

[notheragain4]

We did our application about 2 weeks ago, it's with Nationwide, a month ago may have been when the mortgage market was still very much on hold. Good luck to them!

[Ravenclawgirl]

@notheragain4 I stand corrected and I'll certainly pass that information to my DS and DDIL.

They were on the verge of buying a newbuild last month when their lender told them that the maximum LTV they would consider was 65%. Good luck with your purchase.

[notheragain4]

@Ravenclawgirl not true. Literally had our mortgage offer this week using help to buy, we are doing a 5% deposit, HTB is 20%, so it's a 75% LTV mortgage.

[Ravenclawgirl]

Help to buy probably won't work. Lenders are currently asking for a 35% deposit for buyers using this scheme so they still need to find 15%.

[2ndAugust]

There are a few lenders doing 95%, sometimes just one day a week, and it’s constantly changing - but I’d suggest getting a good broker. Some off high street lenders are but with interest rates above 3%. Obviously if you only took a two year fixed rate you’d probably be able to improve that rate when you remortgaged after 2 years. It’s hard, but may not be impossible. Another £6k savings and you’d need a 90% which opens up a few more lenders. A broker will know how your income will be viewed by each lender.

[BrightYellowDaffodil]

They might restrict the number of loans, but that doesn't make an income multiplier in excess of 4.5 illegal as a previous poster has suggested!

[maddening]

BrightYellowDaffodil

Actually the fca regulations restrict the amount of loans with a loan to income ratio of over 4.5 times the income for 15%. Banks are therefore applying certain criteria for customers to which they will extend the higher ratio, eg first time buyers, qualified professionals, higher deposits so lower ltv. As they effectively have a maximum quota of these types of mortgages. This regulation came in in 2017, if you want to read it it will be in the fca hand book under MCOBS.

[TryingToBeBold]

Just checking my old mortgage value and salary. Me and my DP had 6x offered to us

[BrightYellowDaffodil]

Lenders are also only legally allowed to offer you 4.5 times your annual salary

Do you have a source for that? Because I was routinely offered in excess of that and I’m fairly sure lenders are going to be wanting to avoid breaking financial regulations.

OP I hope it went well with the broker. Contrary to what’s been posted here, there are still 10% or even 5% deposit mortgages out there and while they might disappear temporarily, there’s always going to be mileage for a lender in being the one to offer a better deal than their competitors.

[LakieLady]

I'd be interested to know how you got on with the mortgage adviser, @Wouldyougivemeamortgage.

There's great advice online for improving your "affordability" level. Most of it seems to include clearing debt, reducing outgoings and throwing every penny you can into savings, but in your case formalising your SE income so that it can be included would make quite a difference.

Registering your self-employment with HMRC and submitting an annual return would be a good start. If you're generating an income of £10k pa from SE, that could add £40-45k to your borrowing potential.

[HappyDinosaur]

I think Nationwide have only announced 85% ltv for brokers and online applications, their website says still 90% for others.

[Slippy78]

You'll also want at least 3 months wages saved in your emergency fund, so take that off your deposit if you haven't already.

[Cfmcg900]

Absolute not illegal to lend more than 4.5%. I was offered 6x. A certain amount of mortgages they lend out have to be below 4.5% so that’s what they’ll push for usually.

I think you’re looking to buy prematurely tbh. You’ll want at least a 10pc deposit. You’ll also want shot of that loan.

Give yourself a couple of years to sort out finances. Also gives market time to recover and mortgages to be more reasonable.

[Muppetry76]

Nationwide just announced they're minimum loan-to-value is going down to 85%, the most recent of many lenders to do so.

How did the appointment go op?

[maddening]

Help to buy might make it a goer but that would be a new build. And if your loan is cleared in 2 years then you can pay back the help to buy loan without noticing a change in your disposable.

However at 200 a month how would that clear 7k in 2 years?

When does the car finance finish?

[Marnie76]

It’s still worth talking to the mortgage advisor OP, at least then you will know what to aim for.
I hope you get on ok.

[QueenCT]

Mine is a remortgage but I'm borrowing 85k and earn around 25k if that helps. And my credit score is shocking

[Wouldyougivemeamortgage]

Thanks for all of the replies.

Sorry I disappeared, it was nothing to do with not liking the replies, but for my £32k a year I have to work @Cloverforever and to all the rest for the snarky comments.

Thanks to those who bothered to reply constructively. That's why I asked really, I wasn't sure and I didn't want to waste anyones time.

[ToothFairyNemesis]

That’s a broker calculator.

[ToothFairyNemesis]

Your deposit is too low and you need to pay off your loan first. I would have a minimum of 20k deposit on your salary.
Try here as a guide.
www.nationwide-intermediary.co.uk/calculators/affordability-calculator

[Cloverforever]

I don’t think she liked the answer @Marnie76!

[Marnie76]

Where’s the OP? 😳

[Ravenclawgirl]

I don't think you would get a mortgage at the moment because your deposit is too small. My son and DIL were going to buy a house before the lockdown and now can't get a mortgage without a 15% deposit at least. if you look around 85% is the highest LTV mortgage available to first time buyers at the moment.

[BrightYellowDaffodil]

I would absolutely talk to a broker (I found L&C very helpful).

My circumstances were very similar to yours in terms of income/mortgage required and I didn't have a problem getting a mortgage. Your loan and the current circumstances might change that which is why I'd definitely go to a broker as they often have special broker-only deals available to them and they know which lenders have lending criteria that would work in your favour.

Worst case scenario - would you be able to wait until the loan is paid off and you've perhaps been able to increase your deposit?