Anyone know about mortgage multiples ?

[MillyMollyMoo]

How much difference does my salary count for on top of DH's ?
Where we currently live is entirely in DH's name as I didn't work at the time and so it seemed pointless putting me on the mortgage as I wanted to buy a little place to rent out in the future.
Now lots and lots has changed and in 2 years time we'll be faced with having to put down a massive deposit where ever we move to.
So I wondered if my salary would make much difference, I'd earn about £25k and we'd want to borrow another £100k.
Would I be earning enough ?

Lenders go on 'affordability' nowadays, it's not as simple as income multiples any more. The lender will ask you about your monthly income, financial commitments (credit cards, loans etc) and how many dependants you have, and then will either give you a maxmimum amount that you could borrow (which would be based on the presumption you have an excellent credit score, if not, the maximum borrowing could be less); or they will give you a range of loan amounts based on your credit score (e.g. they may say up to £100k for an excellent score, up to £80k for a good score, up to £60k for a fair score).

Most of the mortgage companies have calculators you can use now, here's a link to the Halifax one and the Nationwide one. This will at least give you an idea.

Hope this helps

Not sure why I've got A's in front of my pound signs, sorry about that!

Bugger lol

Actually quite a lot do base it on multipliers... Alliance and Leicester do 4.2 times joint income for example. You'd be hard pushed to find a higher multiplier though.

Try an on-line broker like moneysupermarket.

You'll need at least 20% of the value fo the house you're borrowing against though BTW.

Deposit isn't the problem, I don't think, it'll be the multiples.
DH was offered 5 times his salary in 2004 am kicking myself we didn't take it, although at the time it seemed madness.

Although it's true that a lot of lenders still base their calculations on set income multiples behind the scenes, for the customer they are no longer an accurate reflection of what they can borrow (unless you have no financial commitments and have perfect credit score). For example someone with an income of 50k might look at a lender's standard income multiple of 4 and think they can borrow 200k. When in reality they have financial commitments of 30k per year (loans, cards, maintenance etc), so the amount they could borrow would be closer to 80k. And that's only if they have an excellent credit score - if the person only had a 'good' score, the income multiple might only be 3.5, which would give a loan amount closer to 70k. But most people don't realise that this is the case, they see an income multiple of 4x and automatically assume that they can borrow that much. That's why the 'borrow up to' figures can be misleading, and unfortunately most calculators don't give you separate high score/low score amounts now, only a maximum, so you have no idea what you can actually borrow until your affordability is checked prior to a decision in principle. And of course each lender has different multiples, different ranges for good/bad credit scores and different rules for what classes as a 'financial commitment' (e.g. some include overdrafts, some don't). That's the reason lenders have changed from advertising set multiples in favour of providing affordability calculators, to make things clearer for customers (and mortgage brokers - even we have no idea what a customer can borrow just by looking at their earnings, as there are too many variables now). I've lost count of the number of customers who come to us looking for a mortage after putting an offer in on a house, only to be told they can borrow half of what they thought!

Alliance & Leicester have a calculator too btw - here's the link.