Realistic mortgage?

Dj_Jestar · 5 Aug 2012 at 20:38

Mortgages are no longer calculated on multiples of your salary. They are calculated on your monthly repayments and your ability to commit to them. Lenders are obliged to refuse you if the repayment will be more than 40% of your income, but if you're mad enough to pay even that much you'll be in for a tough stretch.

craptakular · 5 Aug 2012 at 20:40

I assume its calculated after all taxes?

craptakular · 5 Aug 2012 at 20:41

so can someone give me a rough idea...

If I am on 35k and have 10k deposit. What rough house prices should I be looking at?

cm1179 · 5 Aug 2012 at 20:42

Oxy said:
I'm 29, so a mortgage in 12 months time would mean I can still get a 35 yr?

i would ask them your provider.

The Deuce · 5 Aug 2012 at 20:43

CaptainRAVE said:
5.5x, 70% deposit, temporarily over 40 years. Wage goes up quickly though, so will be bringing that down to 25 years in a couple of years time.

That doesn't make sense, you've put a 70% deposit down but you take the other 30% over 40years. :confused:

craptakular · 5 Aug 2012 at 20:44

cm1179 said:
i would ask them your provider.

I just wanna get a rough idea, not doing anything for 12 months.

cm1179 · 5 Aug 2012 at 20:46

Oxy said:
so can someone give me a rough idea...

If I am on 35k and have 10k deposit. What rough house prices should I be looking at?

i would be looking to buy a property for £150k. of course, that doesn't mean the property needs to be priced at £150k. look for £170k (maybe a bit more) with a view to negotiating down to £150k.

craptakular · 5 Aug 2012 at 20:48

oh I was looking at around £125k seems to get me a nice semi/end terrace in Durham. I don't wanna over commit myself.

cm1179 · 5 Aug 2012 at 20:48

Oxy said:
I just wanna get a rough idea, not doing anything for 12 months.

the halk has given a view on this a few posts up. if you are over 30, it looks like you can get a 35 yr mortgage if you meet the criteria.

cm1179 · 5 Aug 2012 at 20:49

Oxy said:
oh I was looking at around £125k seems to get me a nice semi/end terrace in Durham. I don't wanna over commit myself.

not over commiting/stretching yourself is the best way to go about it.

The Halk · 5 Aug 2012 at 20:57

Dj_Jestar said:
Mortgages are no longer calculated on multiples of your salary. They are calculated on your monthly repayments and your ability to commit to them. Lenders are obliged to refuse you if the repayment will be more than 40% of your income, but if you're mad enough to pay even that much you'll be in for a tough stretch.

The salary multiples are still there, but the affordability is there too - the affordability is the main thing, the salary multiples just form upper limits or even just a guide for the underwriters.

craptakular · 5 Aug 2012 at 21:06

The Halk said:
Depending on your deposit... if your LTV is high and you have a low deposit then you'll find it tough. 3.5x salary is what you should aim for, any higher and you'll need a 15% deposit or higher.

What is LTV?

Hatter The Mad · 5 Aug 2012 at 21:08

Oxy said:
What is LTV?

https://www.google.co.uk/search?q=ltv&sugexp=chrome,mod=0&sourceid=chrome&ie=UTF-8

The loan-to-value (LTV) ratio expresses the amount of a first mortgage lien as a percentage of the total appraised value of real property.

The Halk · 5 Aug 2012 at 21:08

Sorry, LTV is Loan to Value.

If your loan is 70K and your property is worth 100K then you have a 70% LTV.

craptakular · 5 Aug 2012 at 21:14

ok, this is all new to me...

So if I earn 35k broadly speaking is looking at 125k houses sensible? I'm just browsing rightmove at this stage

cm1179 · 5 Aug 2012 at 21:16

Oxy said:
ok, this is all new to me...

So if I earn 35k broadly speaking is looking at 125k houses sensible?

yes. if you've got £10k to put down, you'll be looking at a 110-15k mortgage. don't forget your fee's of probably £3-£5k.

The Halk · 5 Aug 2012 at 21:16

alex24 · 5 Aug 2012 at 21:18

Oxy said:
ok, this is all new to me...

So if I earn 35k broadly speaking is looking at 125k houses sensible? I'm just browsing rightmove at this stage

I think the question is not exactly your salary, but how much you can afford per month. I.e. do you have any ongoing commitments, loans, car etc.

Go to see a mortgage advisor and get walked through the process for nothing - their advice is free of charge.

Deleted member 77746 · 5 Aug 2012 at 21:52

I had to learn mortgages in a week. I wanted a house when I saw it so I had no choice as it would have been snapped up fast.

craptakular · 5 Aug 2012 at 21:55

I have no outoings

no phone contract, no car loan, no debt at all