**Claire**

I have heard in the press recently that the FSA will be imposing a limit on how much people can borrow against their salary. I'm sure I read that a limit of 3x's your annual salary will be imposed. Does anyone know if it is definitely going ahead?

Also, at present I know that every mortgage lender is different but around about what are the limits that you can borrow against your salary? Also what is the maxium term that you can take the mortgage over?

Cheers for any info

pete mcrash

iTrader: (1)

i have a pal thats an finacial advisor......he doesn't cost the earth to sort stuff out for ya.......but he does say that at the moment.......dont bother if u dont need to

Chip

iTrader: (3)

3 * annual salary certainly makes sense, I think anyone borrowing significantly over that is mad unless there are exceptional circumstances such as a significant other source of further income, like taking on lodgers or having a cash in hand job or something.

Most lenders like to go for 25 years it would appear, but I beleive that some are now doing 40 years.

If going interest only though (the most affordable in the short term) its essentially an open ended agreement irrelevant of any initial statement of term as at the end of the term you will need another mortgage anyway as you will still owe the same amount.

dvid

I dont know if it is the same nowadays but I took my mortgage out 4 years ago over 35 years, think they are still fairly common

As for how much you can borrow, I'm sure they fiddle the numbers as we were allowed to borrow about 160K on a combined 35K a year :-S Was tough but we got a good rate and things are much easier now we are on much better wages.. I think if the banks want to lend you the money they will just make it happen, as they will soon take you for all your worth if you miss payments

broadmoor

It all depends on the deposit you have...25% depo is the key to borrowing money at the moment..

Kamike

Max term is 99 years belive it or not

The limit you can borrow is usualy a salary multiple but at the moment a lot of the companys we use are offering mortgages on affordability. So lets say you had a 10k income you can borrow 3.5 times your salary so 35k and for arguments sake lets say the term is 20 years @ £200 per month. The lenders are looking at you disposable income and other dedts like credit cards and loans and if they say you cant afford £200 a month they decline you. Theres also you credit rating to take into account also. Find a good independent advisor http://www.unbiased.co.uk/ and ask them to look into a DIP for you.

HTH

Chip

iTrader: (3)

That was in a rising market where the banks were confident the house price would cover the borrowing.

And thats what happens now they arent!

dvid

^ Yep, glad I got in when I did

**Claire**

We have a 40% ish deposit

mrjenrst

Bang on.
You wont even get entertained on a mortgage without having at least 10% deposit. Some are requiring 15%+.

A kid i work with was having a nightmare getting a mortgage.

As for 160k on a joint 35k is 4.5 times joint salary which is stupid, but last year some ifa's were offering 6 times joint.

Then look what happens

rstdave

iTrader: (3)

Being realistic about it all though, it's alright for the people on here for example who are on a good 50k+ a year but the average joe on 25k who wants their own place is totally fucked really....75k is hardly gonna get you much lol. I know it's all in place for good reason, but in my eyes someone with a reasonably good job earning 25k should be able to afford a roof over their head, say a small 2 bed place. And 25% deposit again....how many people that haven't come into some money (left/given) can save up 25% of a 120k house, i know life's not fair but it's just a complete ballache for so many people just to have a little house on some manky estate!

**Claire**

So, if you earned in the region of £35k a year and you had no other debt and you wanted to borrow £140k do you think it's possible?

neal666

problem is with that is your average persons wage x3 is not enough to buy a respectable house these days.. so either house prices HAVE to fall more or the banks are going to HAVE to lend more? nether are happening at the moment so its a stale mate IMO.

**Claire**

Also the last mortgage company I spoke to said that the mortgage would have to be paid before I was 65 so essentially I could take a mortgage over 32 years if I needed to.

neal666

if the rule of thumb is x3 your wage then no as thats only 105000

Twellsie

iTrader: (1)

or


they could do like they did in the olden days, where you save up some cash first, before buying a house

**Claire**

If it is based on affordability though it is a possibility. Certainly at current interest rates, it would depend on what mortgage deals would be available having a 40% deposit to put down on a property.

Kamike

Depends on the deposite and the value of the house TBH big deposite and getting the house at a price lower than the value then it could be possible. You would have to have a very clean credit history though

neal666

thats fine and dandy but how long will it take a normal person to save up say 30k? given rent,bills and current living expenses! YEARS! unless you have inheritance or a windfall your kinda screwed at the moment.

**Claire**

Say the house is worth £250k, is for sale for £215k and you had a large deposit and your credit history was spot on?

Kamike

Possibly but with out looking I cant answer right now, feel free to PM me in the morning and I will bash it into our search engine and see what terms are avaliable and who will accept it.

broadmoor

In the current climate if the house is on sale for £215k thats all its worth..The fact it has been advertised before for £250k has no baring on what the bank will lend...imho

JohnnyB

if you put 40% deposit on a £160. I cannot see any bank not taking you up on that.

its easy money for them, if you fuck up and cannot pay thats 40% in there back pocket.

you will have no problems. Just find the best deal.

you will not get interest rises till mid next year and then it will be slow, well thats what I think.

so I would go for a fixed as low as you can get and you will get a good rate at 40% deposit.

**Claire**

The property is a repo and they are looking to sell it quickly hence it has been massively reduced in price. I do understand what you are saying though. It would depend on what the valuation would come back as but I'm positive it would be more than £215k.

JohnnyB

just one thing, no point doing a tracker as interest rates will not reduce anymore.

only rise

broadmoor

Looks like you have the correct formula then..

1: Deposit

2: Correct/Current Valuation

The only other question is timing in relation to house prices....Thats a matter of personal opinion..

**Claire**

I've looked on the land registry site and the house was sold in 2004 for £219k I don't know what the increase in the house value would have been in the years before the current housing market slump.

I know that its up for £215k but it's difficult to know what kind of initial offer to put in on the house. When I spoke to the estate agent today who is selling on behalf of the repo company she said that they had a rediculous offer of £175k which wasn't even considered. She wouldn't give me any idea as to what kind of offer would be accepted, she just said that they had to be seen to be getting the best possible price for the house.

The other thing that is a bit worrying is that when you buy a repo the house stays for sale until you exchange contracts. You could get all the searches, valuations, surveys done etc etc and then someone can come along and bid higher than you and their bid can be accepted. I know that this can still happen with a normal sale but it doesn't tend to happen as most properties are taken off the market and have a sold sign put up. That won't happen with this property.

JohnnyB

offer 195, then back it up with just over 200k when they reject.

you may get it at 195 these days

broadmoor

As a buyer you are in a great position with 40% depo and No chain..You would think in the current climate the agent would be offering you a free holiday to help you decide...

15-20% under asking price is not out of the question imho...

good luck

Ginge !

im with jonny, repo houses are about getting there money back they are owed and the rest of it is given to the people who owned the home, they cant cream the extra just claim the debt,, or atleast thats what happened to me with my first place,, the bank debt recoverers sold my place for LESS than i paied for it,,,,, they sold it for the debt and the costs only leaving me with fuck all the cunts !!!!, sold to a fucking housing assosiation too the fuckers

Mr S1

iTrader: (2)

If you've got that level and are a clean credit (ie no adverse) and can prove affordability then you'll get a mortgage. people who say there's no money out there are talking out of their arse - the only difference is 2 years ago anyone could get it. Now you have to jump through hoops and the lenders are calling the shots, not the marketplace or brokers.

**Claire**

I guess it depends what the outstanding mortgage is on the property.

Ginge !

as above, its not theres no money out there,, its theres no giving away money to people who cant afford it anymore,,,, people who aint in debt still have the cash just people who get loans all the time and make min repayments to get by are suffering now they cant borow anymore and they now just work to pay off there debts

Ginge !

claire work out from 2004 with a 3% deposit a monthly morgage payment on say 6% apr on a 215 quid morgage,,, then you would get a rough guess,,,, as in the most the debt will be

remember its the term of the morgage plus 6% a year on top minus the monthly payments,,, maybe another 5k for legal fees

Rhys

Trouble is, first time buyers will be washed out of the market with 3X Salary nowadays As lets face it if you take the UK Average Wage whici is 20k? Or was when looked before. You wont be able to get a house especially on your own Kinda sucks for those people. I'm just glad i got when i did, as i would struggle now to get half decent house.

mrjenrst

passionifa's.com

Will not catch on lol

Psycho Warren

iTrader: (5)

I'm not convinced the average wage for working class is £25k...... bet theyve just used a raw mean or something similar.

Rhys

is it 25k Warren? Jump a bit then, as i know it used to be 20k.

Just checked: http://www.statistics.gov.uk/cci/nugget.asp?id=285 Looks like its just shy of 23k then.

So mortgages people can afford on average living on own are 69k. And this if you think hit peak pay in mid to late 40's? So you average Joe whos in mid 20's looking for a house is going to be less than that



All basic assumptions, but you get what im saying. New time buyers especially ones on their own will find it hard. Feel sorry for them!

Shings

I earn 27k or there abouts ( at the mo and will rise steadily over the next few years )

I have no debt to write home about and a 10% deposit to 150k and a bit left over.

Most I can borrow is £125k or there abouts which by me at the mo will get me something ok and should do as I have 2 offers in on houses at the mo and I am going to up one tomorrow.

The problem is the money grabbing estate agents not managing the vendors expectations.

I have just been to look at a third house tonight and the estate agent was bang on, priced the house sensibly and knows it will sell easy at that price, managed the expectations of the buyer.

dovboy

so is that nearly 5x your earnings you are taking?

are you a first time buyer btw?