Mortgage application questions

[Saurus72]

DH and I are looking to move within the next year or so, and I keep reading articles about the mortgage application process getting much more stringent. We currently pay a mortgage on the property we have lived in for over 7 years and expect to have approximately £70-£80k to put down as a deposit for our next property, which will be around 25% of the total mortgage value. We will be applying for a mortgage equivalent to less than 3 times our joint income.

In terms of affordability of the bigger mortgage we will need, I have worked out that after all bills (including spending money for DH and I) we would have approximately £700 per month left, which would be saved or used for things that need doing around the house, eg, new boiler etc. or could cover interest rate rises in the future (we will be going for a 5 year fix). Does that sound affordable from the mortgage company's perspective?

We have a loan that will have around £7k left on it when we apply for the mortgage (the repayments are factored into the monthly budget I described above). Will this count against us when we apply?

TIA

Why don't you go on line and use a mortgage company's affordability calculator?

Nationwide have already started using the FCA guidelines, and their on line calculator, provided you input all the details accurately will give you the same result as when you eventually sit down with an adviser.

Yes, I did look at that, but I couldn't work out what to include. I'll have another look though.

It'll ask for your salaries, and then lists the monthly outgoings that they will take into account. Also number of DC etc. It really is quite straightforward. There is an iPhone app too.

Well, based on that they will lend us £0. When I removed the loan from it, it said it would lend us £313k! This is what I remember from the last time I tried to use this - it seems unlikely that a £7k loan, given the relatively low loan we would request, in relation to our income, would mean they wouldn't lend us anything at all. Or is that the case now - people can't get a mortgage if there are any outstanding loans?

Did you put the loan in as £7000 or did you put the monthly payment in? It asks for the monthly payment so if it thinks you pay 7k a month it's no wonder it won't lend you anything!

well how utterly embarrassing, that is exactly what I had done! So it turns out we're not financial pariahs not worthy of being lent to - I was just being a doofus. Thanks so much

Easily done! You're welcome