Mortgage in principle 7.5x my income - worried they've made an error

[lollypop345]

I've been given a decision in principle for 7.5x my income. My mortgage appt to properly apply is next week, I've been having a google and it seems the max they would ever lend is 5x your income and now I'm in a complete panic they've made a mistake and the mortgage in principle will be revoked!!!

The mortgage will be a ported mortgage, at the same amount which I currently borrow. But since getting my initial mortgage I've had a paycut. I told them my current income when doing the decision in principle and it was all approved.

Could it possibly be anything to do with the fact my credit score is 999 and I have a perfect track record with them for my mortgage payments? Or shall I be prepared to be told I can't have a mortgage for that amount when it comes to my appointment...

Have you thought about “rent a room” in your house? Rather than buy to let and yet another mortgage, you can let a room in your house up to £6500 pa tax free. I think those figures are right. You could have a bigger deposit, one mortgage and a bigger house. I’m assuming your property isn’t expensive if your mortgage is only £600 pm.

I think you probably earn around £20-25k depending on length of term of mortgage. A multiple of 7.5 seems risky.

I was trying to create a new thread and posted here by mistake. Sorry op. Have asked mumsnet to remove my post.

@Guymere I am expecting a baby soon so am not comfortable with renting a room out in my own home. I plan to buy a HMO or a 2 bed flat to let to professionals, a good investment and will generate some extra monthly income. I am a landlord with two flats (can't use this income towards my mortgage application as the mortgages aren't in my name unfortunately, long story, flats are inherited) and the monthly profit is a brilliant extra and I want to build on this, so that I am able to work less hours and have a good income whilst I have a young family. My current property I just sold for 325k, that I have a 600pcm mortgage on. New property nearly 100k less in value but I don't want to sink all of my money into the new house as the reason I sold was to buy a cheaper house and use the leftover equity to buy a BTL. Hope that makes sense!

@Guymere I earn 30k pcm from my job and find 600pcm mortgage perfectly affordable, my partner pays half as 'rent' as he lives with me but it is my house. I've paid way more when renting as a broke student!

Is property a good investment right now? What criteria are you using? You will be paying a lot of CGT when you sell. I hope you are saving for that.

So £30,000 x 7.5 = £225,000. How is this £600 a month? That’s very low. Assuming 25 years!

@Guymere no it was 40 years so 37 now. 1.24% interest

@Guymere won't be getting a BTL at least until end of next year dependant on the market etc but would like the funds available also some for renovations in my resi home. Most of my family have owned BTL's for years and years and quite a few live very comfortably off of the income and don't work/hardly work so something I would like to work towards for myself 😊

I’m sure they do! I let out a house and it’s not a money machine. Have you thought about CGT? Renovations? Houses don’t stay great forever. Anyway up to you. Good luck.

@Guymere if you buy a BTL in a company name you pay much less cgt as can claim mortgage payment as a cost which you can't do if in your own name. But yeah not something I will be doing soon anyway. Thanks 😊

So I called nationwide and they said that because I'm not changing the amount I am borrowing they don't need any confirmation of income, bank statements payslips etc for the mortgage port. What a relief 🙂

@lollypop345 you sound very sensible to me, good luck with it all.