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Original poster

How many times your salary can you borrow when moving house??

26 replies

Twinkie1 · 22/01/2007 11:18

Can someone who know about £££ help me?? We are hopefully today putting an offer in on the house of our dreams - I am so excited I can hardly see properly!!

We have £200k equity in the house we have at the moment and would need lots more to be able to get the house we so dearly want - we have money saved for fees and stamp duty and don't have any outstanding monthly payments other than utilities and food - so how many times DHs salary would he be offered??

He will know soon as he got an appointment at 12 but I just want to know if I should go in the toilet and have a good cry now or wait till he comes back and says no!!

I think going on his salary now we would need 5 times his basic - if they take into account his bonus and his pay rise which we will know about next month it could be 3 or 4 times his annual income.

OOOOOOO I feel so sick - still got to sell our house too - but the vendors said thay will take theirs off of the market if they accept any offer we make!!

OP posts:

itsmeNDP · 22/01/2007 11:19

depends on your lender, twinkie. Some do 5x

Original poster

Twinkie1 · 22/01/2007 11:39

Thanks NDP - we are hoping if DH goes to the bank he works for they will figure in his bonuses etc.... and that could make a huge difference - I'm just not sure how any of this works and am sitting here waiting for hm to get back to me whislt shaking and hoping to god that someone will say yes!!

OP posts:

itsmeNDP · 22/01/2007 11:46

Some lenders are focusing on affordability too rather than X times your salary, which could work in your favour too

Original poster

Twinkie1 · 22/01/2007 11:53

Lets bloody hope so - we walked around this house and just looked at each other and squeezed each others hand - I haven't had any sleep and will be so disappointed if we can't afford it!!

Its definately the house of our dreams - we could stay there until DD and DS are old enough to fly the nest and we just knew right away that it was the house for us, as much as I take the kickey out of people who say they did or didn;t get a feeling when walking round a house I know what they mean now.

God I can just about ingest my cup of tea let alone do any work and I am so busy!!

OP posts:

itsmeNDP · 22/01/2007 11:57

I hope it all goes your way, twinkie

granarybeck · 22/01/2007 11:58

Go to the alliance and leicester website, mortgages, then borrowing calculator - they have just agreed to lend us a very generous amount! It lets you play around with how including and not including bonuses affects the amount they will lend you.

twickersmum · 22/01/2007 12:09

i think you should get it - 5x isn't that much these days! esp based on just one income.
What % of the house value would be mortgaged? That can affect how much they give you too (lowers the risk if the % is lower)
They based ours on affordability rather than multiples, so if you haven't any credit card bills/loans etc the amount they offer you can be ridiculous!

mumblechum · 22/01/2007 12:42

When we bought this house 7 years ago we borrowed about 6 times dh's salary (I wasn't working), which was exactly £500k.
That was based on affordability, not taking bonuses into account.

It would probably be a good idea to get a fixed rate, if you can. We've just rearranged the mortgage with Nationwide at 4.94% for 2 years which is pretty good.

Original poster

Twinkie1 · 22/01/2007 12:43

Thanks - DH is in with the advisors at the bank he works for at the moment and they havebn't kicked him out and laughed at him yet as he hasn't got back to me!!

We would neeed 365 as a worst case scenario and we have £200k in equity on ourhouse now - we had a credit card but recently apid it off so don't really have any debts.

If we do get it we need to tighten our belts for a few years - DH has told me to have a farewell lunch with my friendly ocado man and get used to Sainsbury's or Tesco - Can't face Asda quite yet though - you never know though!!

If this was a month later we would be ok as would know what DHs bonus was and his pay rise but I suppose the bank may know that as they will be apying it to him anyway!! He is really good though and doesn;t have any bad credit or debts and has never not paid everyting on time so I am hoping that will go in our favour - means we will be abck up to 25 years rather than the 10 or so that we had left but we think we could pay it off sooner if we paid a lump sum each year - but I suppose that all depends on whether the mortgage company allow you to do that!!

I have emailed DH and told himto get his butr around to Alliance and Leicester though!!

OP posts:

DrDaddy · 22/01/2007 12:50

Most mortgage lenders will base it on a multiple of your salary (normally 4 times single or 3.5 times joint) but you can opt to "self-assess" on the internet and I've heard of people borrowing 7 or 8 times their salary. So if you want it, you can probably get it. However, as others have said, it will come down to affordability. Interest rates are likely to rise again, so you want to find a good fixed rate. Also, as Twickersmum says, rates will also depend on your Loan To Value (LTV), i.e. %age borrowed vs. equity put in, e.g. 70%, 80% etc.
Good luck.

prufrock · 22/01/2007 12:52

Realy shouldn't be a problem Twinkie. You have lots of equity, and at your level of earnings they do take affordability into account far more. When we bought our house we got a mortgage that was 9 times dh's basic, but only 3 times his previous years basic + bonus. We also took out the morgage on an Interest only basis, and pay off big chunks of captal once a year at bonus time, which really helps with cash flow.

Good luck, and I hope it all goes smoothly

Original poster

Twinkie1 · 22/01/2007 12:59

Thank you - I can't believe he hasn't come back to me yet so it must mean that it is going well - we can afford it basically - will have to cut down for a couple of years unless he gets a disproportionately high bonus and pay rise - but then it is on the cards for it to be better than previous years as he has finally been recognised and had head hunters after him for the last 6 months - even his boss said that the first thing he thinks of in the morning is 'I hope DH'sname is in'!!

Oh well thansk everyone - hope you ok Prufrock - haven't seen you for at least 2 years!! - think you had just had DD or was pregnant maybe!!

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noddyholder · 22/01/2007 13:02

They do take everything into account now Brokers can get you a mortgage for almost any amount.We got a mortgage once and i was ill and dp had given up work to look after me we had lots of equity like you and the bank of scotland gave us a mortgage based on god knows what The chelsea bs and northern rock are also quite generous

cazzybabs · 22/01/2007 13:03

We are in the same boat twinkle - we want to borrow £200K and have equity of about £300K. Its more the worry of paying it back. Dh has said he will block the boden site and have to never go out. And it is not even the house of our dreams - it has been left in the 60s - wood ceilings, brick wallsm dark wooden doors and a kitchen that is horrid! But it is big and has a nice garden!

Fingers crossed hey!

Original poster

Twinkie1 · 22/01/2007 13:23

Well he just got back and with what they say they are able to lend us it will be very tight and we will have to sell a car, cash in some share options and sell some wine (DH bought it years ago for an investment - its not bottled and I'm not sure what he is talking about when he goes on about it to be honest!!) - but we could do it - he is going to go and see what the independant broker has to say later - we have a mortgage with Northern Rock so they maybe nice to us.

The actual repayments aren't a problem it is just getting them to say yes you can have a huge amount over 25 years - I feel like crying now - something has to happen to get this rock off of my chest!!

OP posts:

prufrock · 22/01/2007 13:32

Independant brokers can often get far higher deals - and better rates - especially for high earning profs like your dh. I'm sure you will be OK.
I'd have just had ds last time we met- and you weren't even pregnant with M!

Original poster

Twinkie1 · 22/01/2007 13:35

Wow ages ago then - Mis a little nightmare - trust me when I say if I had had him first I wouldn;t have had another one - one fo the reasons we have to move is so we can have a secure room to lock him in - he he. Hope your kids are fine and life is treating you well - I never get to be on here much these days and think people are all new and don't know me - feel a bit of a newbie to be honest!!

OP posts:

noddyholder · 22/01/2007 13:50

Northern rock have a mortgage called together which is quite good and has a cash reserve aswell.I think you should approach them direct if you are already with them they are likely to say yes

Original poster

Twinkie1 · 22/01/2007 17:28

Well everyone - just thought I would update you - Alliance and Leicester look to be the ones that you need to go for - they said we could borrow 500k which is far more than we need - Alexander Hall were great definately wortht he £500 quid paid to try and get this mortgage!!

DH is on the phone now because we want this house we have offered the asking price and negotiating it being taken of of themarket for a while- it is our dream house - I could not be more thrilled!!

So thank you all who replied to me today - I will justhave to hope that our house sale happens quickly and then I wil post you a link to our new house!!

I am happy happy happy - and when XH sees my new house he is going to be sick - will serve him right for spending his bit of the divorce settlement which he fought so hard for giving me naff all on a red speedboat!!

OP posts:

NannyL · 22/01/2007 18:04

my mums is a mortgage advisor for C&G

the system comes up with a figure depending onnyour credit rating etc (and if you have a well run lloyds tsb account that is a bonus as well)
typically they will lend up to 3.5 X a joint income, or about 5X a single income.... btu it depends on the system

until the summer she could over rule by 20% but not any more since august... that is just C&G though

twickersmum · 22/01/2007 19:52

great news

itsmeNDP · 22/01/2007 20:02

Excellent news Twink

happynewme · 22/01/2007 20:06

Depends on your financial advisor... when I took out my mortgage I was self employed, low wages, less than a years books, single parent and I got a 72k mortgage. Have a lot of equity in the property though I guess thats why I got it!

magicfarawaytree · 22/01/2007 20:14

we have a c&g mortgage -on salary we were able under normal calculations to get max almost 250.We negotiated with the bank ( well dh did) and were able to get £400k mortgage.

redshoes · 22/01/2007 20:15

Oh Twinkle, you sound so excited! I have my fingers crossed that it all works out for you? Where in the country are you? x

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