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?

[GreyGardens88]

Your deposit is too low, can anyone gift you anything? You may have to save for another year which may be sensible anyway as we are not sure which way the market is heading. You're at risk of negative equity with that deposit

[okiedokieme]

As a guide they will lend up to 5x salary but as you have significant loans this will be significantly reduced. They will make you do a realistic budget to see how much you can afford to pay each month taking into account the minimum loan repayments. Without a guarantor I doubt more than £100k. We only just met the criteria for £200k despite earning 5 x your income (cms etc had to be taken into account)

[LinemanForTheCounty]

Talk to the broker. It doesn't matter what Mumsnet thinks. It doesn't even matter if most lenders wouldn't agree. You just need to find one who will. It's in your broker's interests to do that with you and they are best placed to do so by looking at your particular circumstances. With the loan, they're not interested in you overpaying: they just need to know what your commitment is ie what you absolutely have to pay so the £200 minimum is the relevant figure. Good luck!

[Kelsoooo]

There are 5% deposits available atm

You need to speak to a broker/advisor. Some of the advice on here is just wrong.

[Racoonworld]

Sorry I think it would be a stretch anyway with your income to get that much approved, but your car finance and loan repayments are very high. Could you get those down first and up your deposit?

[ALWwoods]

Santander are very generous with lending.
They usually lend 5 x your salary. We have had 2 mortgages with Santander. We’ve always had a 30% ish deposit tho which may make a difference.

[Wanttobeateacherinscotland]

You’ll struggle massively without 10%

[Tiktokcringeydance]

Sorry OP not to add anything helpful but this post just (depressingly) illustrates how housing costs have risen so steeply against wages.
Even taking into account SE wages so 42k (which is significantly above the average wage) they will be getting a mortgage that wouldnt cover a 1 bed flat in many areas.
I get so pissed off at people saying millenials cant afford to get on the housing ladder because they buy too many costas or avocado on toast when OPs situation will be the reality for many!!

[SomeHalfHumanCreatureThing]

Try L&C, they might give you an idea

www.landc.co.uk/

[Cornishclio]

Usually a 10% deposit is needed although some offer 5%. Some lenders will go up to 4.5 times income but more often it is 4. Your self employed income may be an issue with one 1 years accounts and your debt will impact on it by reducing your disposable income by £450 per month. I don't think it is wasting a brokers time as lending criteria differs between lenders. Just make sure you know the top monthly figure you can afford and go for a fixed rate.

[Muppetry76]

Is the £32k gross or net? Is your self-employed income 'registered'?

Not a chance where I used to work I'm afraid. In current financial environment I suspect you'll need at least 10% deposit, plus the loan and car finance are quite a substantial chunk of your monthly outgoings.

If you COULD get the mortgage at 90% your repayments would be approx £700 per month. Plus - ground rent/council tax/gas/electric/water/phone/insurance/mortgage protection insurance etc, before any luxuries. Can you afford that bearing in mind the loans? (ie if the loan was for debt consolidation, can you show that you're managing your finances well now?)

Having said that, there are some lenders who are prepared to take on higher 'risk' customers. This is where your broker will earn their commission. They have knowledge of lenders who will be more flexible with Loan-to-Value, affordability and existing debts, but it might cost you a higher interest rate.

[MaeveDidIt]

Don't cancel the appointment.
See what they have to say.
Do not stick to one advisor; speak to at least three different advisors so you are well informed.
Knowledge is power.
Good luck you might well be fine particularly in this climate.

[Reedshoes]

Same as what others have said. You’ll be lucky to to find a mortgage deal that will accept £10,000 as a deposit on a £160,000 property.

Especially during the start of what’s going to be a recession heading our way. Banks will be tightening their criteria.

You might be better looking at one of the other schemes that Thad on offer that would be ideal fit someone who can afford it on paper but they can’t get the deposit. Can’t remember what the scheme was it if it’s still available but worth googling

[Whattodowhattodooo]

We just got some info from a mortgage broker. All our debt had to be paid off. They won't look to kindly on the loan 🙄

[Whattodowhattodooo]

And to add that is with a £50k deposit, but then we are in the South East.

[dobbleby]

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

I pretty sure you can go up to 5 times & access ones with lower deposit amounts or interest only but you need to earn more than 80k & have a "professional" job.

However because of your outgoings I would look to increase your deposit.

[BarbaraofSeville]

Are you a first time buyer? There were 95% loans for FTBs in the paper at the weekend, but the rates were comparitively high - above 3%, when you could get a rate of less than half that with a bigger deposit. Plus as others have said, you might struggle with affordability.

House prices are more likely to drop rather than increase over the next year or two as the economic fallout from coronavirus kicks in, so your best bet would be to pay off your debts, try and save a 10% deposit (rates are always better for 90% mortgages than 95% ones) and hopefully the rest will fall into place because prices will probably have dropped and your self employed income should be more established if you're still doing that, so should count towards affordability.

If you qualify, have you got a Lifetime ISA for the bonus?

[dobbleby]

We only just met the criteria for £200k despite earning 5 x your income (cms etc had to be taken into account)

You earn 150k & could only borrow 200k. I wouldn't say that was the norm tbh.

[dobbleby]

What do you pay for your housing costs at the moment?

[crazychemist]

See what they say on the phone call, but I wouldn't get your hopes up too much - you have less than a 10% deposit, which limits which products they might consider you for, and they could very well count the debt against you, in which case they might only consider it as a 3K deposit.

They won't count self employed income unless you have Tax returns (I was asked for 2 years of tax returns, so nearly 3 years of income needed). So that means that you're looking at asking for more than 4.5x your income - you're not very likely to get that at the best of times, and I suspect banks will be being rather careful at the moment.

Just checking - is the interest you are getting on your 10K deposit more than the interest you are paying on your 7K debt? Might be worth speaking to a financial advisor/debt advisor about whether you are better reducing debt as quickly as possible or building up deposit faster.

Have the phone call. They'll be able to tell you what they can do, and even if they can't find a mortgage they can offer you, they'll be able to give you lots of information about what you'd need to do to get one so that you can get yourself into a better position.

[LaurieMarlow]

This thread won’t be very helpful. It’s all just noise.

Your mortgage advisor will be able to tell you.

The mortgage advisor will also tell you what you need to do to get one if it’s out of reach currently.

[Wanttobeateacherinscotland]

Yes, when I’ve done online calculations with L&C the amount of debt we have come straight off the total we’d be offered.

[altiara]

Have the call and then you know what you need to do.
Ask which is the priority - saving for a bigger deposit or paying off the loan quicker.

[ratethesenames]

Plus around £10000 self employed income (only last 12 months no accounts)

If you've no accounts this won't be counted as income

[rosie1959]

Speak to a Mortgage Broker the market for mortgages is moving very quickly at the moment with enhanced affordability checks due to coronavirus
Speaking from experience my DH has been a broker for the last 30 years