Is this possible? 4.5 times my salary

[ChickenLittle20]

I've started looking at properties again after taking a break after my flat purchase fell through months ago. I've continued to save since then and now have a 10% deposit instead of 5.

My salary is quite low at £20,000. During the last process lenders multiplied my salary by 4 which didn't give me many options. The flat I tried to buy was £80,000 but had multiple issues, hence why it was so cheap in the first place. After a terrible experience I've been completely put off by flats and have decided to look at terraced houses instead. In my area you can buy a decent terraced house for around £95-100,000.

Is it at all possible to find a lender who will lend 4.5 times my salary or am I asking the impossible since I don't earn very much? It would give me a lot more wriggle room. Changing jobs isn't really an option as I'm pretty happy there and it's taken me a long time to find a job that I enjoy and don't absolutely loathe. I thought I'd come on here and ask for some advice before I contact the broker I used before

Try London & Country. They are a free broker. They'll be in a better position to advise you.

I thought lenders did 4.75x salary.

Make sure you work out what the monthly payments will be. Get a fixed rate. Interest rates will almost certainly go up. Some of us remember interest at 15%.

Once you have a house you can consider having a lodger.

Bear in mind that with owning a home you will be resonsible for the upkeep

It's possible but I'd keep saving as much as possible during the conveyancing process. We only got our house because two previous purchases had mortgages in principle that were reduced at the last moment, just before exchange. We paid for the searches and survey done by the 2nd purchasers to help them recoup costs but they still ended up hundreds of pounds worse off. Not all subsequent buyers would cover costs. I only did because I worked at the law firm the second purchasers used and was happy with the risk of using the survey for another couple.

From what I understand it depends on some fairly strict affordability checks, but you're in a much better position with a 10% deposit than a 5% one.

I live in London where affordability gets stretched to the limit a lot or no one would ever be able to get on the property ladder, so I know people who have got 4.5 times their salary.

DD got 4.6 through the Skipton but using a broker. She literally had no outgoings at all though, no normal loans, no credit card balance, nothing other than her student loan which was low as she had an NHS funded tuition degree.

And 10% deposit

Some advice. If you're going to fix (and intend on staying in the property for this period) consider a 5 year fixed. They're cheap money currently (if nothing out of the ordinary) and the lenders will usually look at lending higher.

If you have any debts or regular expenditure that cannot be stopped that will have an impact on what you can borrow.

Do you have legal fees on top of your deposit?

Did you say what size deposit you have? I think it’s relevant.

Sorry, you said you have a 10% deposit. What actual value is that though?

I'm pretty sure you can get 4.75 x salary - I don't know if that is joint applicants rather than single though.

I think we got that with Natwest or alternatively Nationwide.

No advice on mortgages I'm afraid but getting on the property ladder is an excellent plan - long term it is a very sensible financial plan. Good luck with your broker.

I can remember high interest rates and always get twitchy when people talk about stretching themselves so much. When I first bought, my special first time buyer low rate was 11.5%.

You’re looking to buy when the market is high, interest rates are low, and prices of basics like fuel and food are rising.

Be careful.

If a flat would be a little cheaper, then my own preference would be to go for that. Less risky, but still gets you on the property ladder.

It's been in the news recently that some of the big lenders are now offering mortgages of 5.5x salary to help people get in the ladder. Will probably also push prices up.

Looks possible. Ran it through the Natest calculator and they will lend 85k assuming the following:

£20k income
No debt
£10 deposit
25 year term.

Monthly payments: £373 - £414 depending on which deal. I would suggest a 5 year fix if possible as we are entering a high inflation era.

Most lenders will do 4.5 times income. Some go as high as 5. Some go even higher