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?

[Batqueen]

Have the call so you know what to prioritise in your savings and financial goals.

Do not worry about wasting the brokers time, they are the best person to advise you and if they do a good job you might come back to them if you are in a position to buy later if you aren’t right now.

[MOR19]

There’s a great mortgage calculator by Martin Lewis on the Money Saving Expert website. You put your figures in and it lets you know which lenders are likely to lend and how much. We used two mortgage advisors and the website showed us better rates than the mortgage advisors had been able to demonstrate.

[Winter2020]

If its going to take you two years to pay off the £7300 on your loan, and you could also do with more deposit, could you live anywhere cheaper so that you can up your spare income and save more quickly? shared house/lodger/stay with relatives?

[Wynston]

Dont cancel the appointment op you need to go through all the options.
Even if its a no at this time its really important to know how to change things for it to become a yes in the future.
Its not a waste of time and I agree with pp talk to a few different brokers as with everything they will vary.
Good luck.

[FrameyMcFrame]

HSBC are currently doing 95% mortgage and there's others on money saving expert.

If high street lenders are then others will be too

Make sure you have a decent independent broker who has access to a wide range of lenders and isn't affiliated with specific organisations.

I'd say you have a good chance but the interest rate you're offered may not be very competitive.

I'm self employed so I know the difficulties, having a good broker is key

[FromMarch2020]

Deposit isn't high enough for lots of lenders - or at least not a big enough deposit to get the best mortgage rates.

See what a mortgage broker thinks

[Equimum]

I doubt it. We bought in 2012 when things were much relaxed, and because of small amount of debt still being paid off we struggled to get a 90% mortgage and were advised it would be easier and more cost effective to apply for an 85% mortgage. At the time, we were applying for a joint mortgage based on DH’s salary of around £50k and declared additional income of around £15k. House value was £182k, so not dissimilar. We had around £3k in car finance to pay, which we ended up paying off before taking the mortgage. (We eventually put down. Based on this, I think it’s doubtful you’ll easily find a mortgage, and if you do, it will be very expensive.

[Truthpact]

Just have the call. It will take 30-60 mins of your life to find out, and it's their job to do, they accept/reject people everyday. Plus even if the broker accepts you, that's no guarantee a mortgage company will. They could still turn around and say no.

Have the meeting and find out what the chances are. May be a no, may be a yes. You'll have to find out.

[LaurieMarlow]

Definitely have the call though, OP. It will be helpful even if you don’t get the answer you want.

[WhatATimeToBeAlive]

You'll probably also struggle with the car finance and loan - £450 is a big chunk every month. I had a £70 a month loan (no other debts) when we took out our mortgage 2 years ago and they extended the mortgage period just because of that based on affordability and I earn a bit more than you.

[emmathedilemma]

Even though I suspect the figures aren't going to add up for this property, I would still have the call to get some advice on what you can realistically afford, how the current market it is, and to try get any feelers on how it might change in the next couple of months. Properties that you can't afford now might be affordable to you if you wait and the market crashes. There's a property in my street been on the market since just before lockdown at offers over £250k and an identical one (give or take decor but they're not that different in standard / finish) went up at offers over £235k. So I'm not sure if that's because they think the market is falling or they're looking for a quick sale, or it might be that they think it attract more buyers if they put it on just below the stamp duty threshold.

[Longdistance]

Pay off that loan with the £10k deposit.

Then top up the deposit every month you haven’t paid the loan.

[Glitterb]

Natwest have a mortgage calculator which should give you an idea of what they will lend you

[Jeremyironsnothing]

Well you manage when interest rates get higher again?

[doublehalo]

Do the call OP but I doubt you'll be offered anywhere near the amount you need.

You don't mention if you pay rent and how much? In any case your finances need a lot of work. Pay off the loan asap within the next few months and start saving like crazy!

Good luck.

[Theyweretheworstoftimes]

Mortgages are based on affordability not number of times income.

The mortgage provider will look at your typical income and expenditure which they will get from the bank statements you provide.

They look at the cash you have after your essential and non essential bills are paid. Essential council tax, gas, non essential gym membership and hair cuts.

You could earn an average wage but if you have a frugal lifestyle than you are likely to be given a bigger mortgage than someone who earns more and spends more and has higher committed debts.

The debt you mention may be a challenge loan and car finance will have an impact.

After they work out what you can afford they will stress test it. They will look at today's rates and then possible future rates depending on what your LTV and repayment profile look like.

www.moneysupermarket.com/mortgages/

www.citizensadvice.org.uk/debt-and-money/borrowing-money/types-of-borrowing/mortgages-and-secured-loans/

www.google.co.uk/amp/s/www.moneyadviceservice.org.uk/en/articles/mortgage-interest-rate-options/amp

Also there are different types of mortgage and dependent on which one you want will affect potential affordability.

[TryingToBeBold]

Yea your mortgage advisor will be the best person.

If it helps I did 5% deposit on 160k house 6 years ago but I took on a 20% Help to Buy loan and therefore only needed 75% mortgage.

It worked for me and after 5 years I I remortgaged and paid the loan off before I started paying interest (plus 12k - you have to pay back 20% of your house value or the loan value depending on what's higher.. and my house gained value).
That could be an option for you?

[TryingToBeBold]

It's not a bad idea to pay off your loan with the deposit and start saving again

[Hargao]

@DustyD2

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

This. Is your deposit everything you have or have you already accounted for these expenses?

[pinkglove75318]

You will need at least 10%deposit.
So at least 16k before you start. Unless you are looking at a help to buy type scheme.

If you have an appointment with MA, then they will tell you exactly

[Ifancyabacontoastedsarnie]

you need to save more deposit but you are on good wages it wont take long, you are so lucky

[KaptenKrusty]

I’d pay the loan off first and start saving then after that if I was you! where is your deposit being saved? Do you have a life time Isa? Husband and I are saving in a LISA each and the gov top it up by 1000 for every 4K you save each tax year

You definitely need a bigger deposit - like at least another 6k!

I really find it hard to be saving for 2 things at a time though - so I paid off my credit card first then I could shove all my spare cash into the deposit At that point rather than some on the loan some in the deposit fund

[YinuCeatleAyru]

A mortgage broker will probably be able to find a lender who will take you on, but I would question whether that would actually be the best path.

TBH I would advise waiting a couple of years. That will give you 3 years of accounts for your self-employed income which means that income can be properly included in the calculation.

If you can also manage to get your deposit savings up to more like £17,000 that would be good - would require you to save £290 per month.

Whilst it would be nice to also pay off the £7300 loan by the end of 2 years, I doubt you could manage to do both and having a higher deposit will make more of a difference to your attractiveness as a potential customer than having the loan paid off. Obviously great to continue putting overpayments into that if you can do so after having put in the savings.

A mortgage advisor will not give you this advice because that won't make them any commission. They will instead find you an expensive and unwise deal that might land you in financial hot water in the long run.

[beautifulxdisasters]

I was offered 5x salary last year but had a 30 percent deposit.

I doubt you will be able to get a mortgage of anything above 90k with that deposit unfortunately as they will want a 10 percent deposit.