Mortage vs salary
Discussion
I was wondering how this is calculated nowadays, I remember at one time they were offering out 5X salary to buyers which obviously has come down it seems to more like 3 now?
How many years of payslips do they take into account? I was wondering this because I work in a job where my basic is £x and my bonus over the year (get it QTRLY) takes it up by x%.
It is only basic they look at?
Just wanting to see how others have found it, as it seems on paper that to buy even a 1 bed flat around where I am (expensive, but not central London by any stretch) I'd need to be earning £70k a year (£210k flat).
Sorry for title spelling fail.
How many years of payslips do they take into account? I was wondering this because I work in a job where my basic is £x and my bonus over the year (get it QTRLY) takes it up by x%.
It is only basic they look at?
Just wanting to see how others have found it, as it seems on paper that to buy even a 1 bed flat around where I am (expensive, but not central London by any stretch) I'd need to be earning £70k a year (£210k flat).
Sorry for title spelling fail.
okgo said:
I was wondering how this is calculated nowadays, I remember at one time they were offering out 5X salary to buyers which obviously has come down it seems to more like 3 now?
No. you can still get much higher multiples than 3x. Well over 4x is usual, however most lenders have switched to affordability calculators so they don't just take your income into account, they also take your outgoings, and your family status into account, even the length of the mortgage will affect the sum some lenders are prepared to lend.
On top of that some lenders now lend different amounts at different loan to values.
Its not as basic as "you earn this,so we'll lend this" anymore.
A good credit score is really helpful with some lendrs at the moment. They do discriminate off the back of it.
okgo said:
How many years of payslips do they take into account? I was wondering this because I work in a job where my basic is £x and my bonus over the year (get it QTRLY) takes it up by x%.
It is only basic they look at?
Again depends on the lender, some will take a quarterly bonus and average it over the year, some will want to see evidence of ongoing bonuses so take p60's into account. Others won't take your bonus into account, or may take 50% of it. At hight LTV's you'll need 3months paslips for a starter.It is only basic they look at?
okgo said:
Just wanting to see how others have found it, as it seems on paper that to buy even a 1 bed flat around where I am (expensive, but not central London by any stretch) I'd need to be earning £70k a year (£210k flat).
You'd have to take your deposit off the £210k.So if you have a 10% deposit, you need to be able to service a £189k mortgage.
The higher the deposit you have the easier the rate, and in some cases the criteria.
okgo said:
I was wondering how this is calculated nowadays, I remember at one time they were offering out 5X salary to buyers which obviously has come down it seems to more like 3 now?
How many years of payslips do they take into account? I was wondering this because I work in a job where my basic is £x and my bonus over the year (get it QTRLY) takes it up by x%.
It is only basic they look at?
Just wanting to see how others have found it, as it seems on paper that to buy even a 1 bed flat around where I am (expensive, but not central London by any stretch) I'd need to be earning £70k a year (£210k flat).
Sorry for title spelling fail.
I don't think they go on salary multiples anymore, more along the lines of affordability. So, looking at your current loans and outgoings what have you got left to service a mortgage. Extra layer of complication would be LTV.How many years of payslips do they take into account? I was wondering this because I work in a job where my basic is £x and my bonus over the year (get it QTRLY) takes it up by x%.
It is only basic they look at?
Just wanting to see how others have found it, as it seems on paper that to buy even a 1 bed flat around where I am (expensive, but not central London by any stretch) I'd need to be earning £70k a year (£210k flat).
Sorry for title spelling fail.
Not quite true, because you'd have a sizeable deposit presumably, which brings your 3x figure down considerably. Factor that in.
When we got our mortgage, our salaries weren't checked at all. No payslips, nothing. We were told that because we weren't claiming to be earning ridiculous amounts, they didn't need to know! (At the time though we were earning £16k and £12k, so perhaps that was part of it)
When we got our mortgage, our salaries weren't checked at all. No payslips, nothing. We were told that because we weren't claiming to be earning ridiculous amounts, they didn't need to know! (At the time though we were earning £16k and £12k, so perhaps that was part of it)
Most will need to see the last few payslips, be prepared to take in 6 or so. My brother in law and sister had trouble earlier on this year, hes a postman so his basic is rubbish but overtime is good, they were looking at an average over the 6 months. At the end of the day they want proof that you can afford the mortgage and will comfortably be able to pay it every month.
Pulse said:
Not quite true, because you'd have a sizeable deposit presumably, which brings your 3x figure down considerably. Factor that in.
When we got our mortgage, our salaries weren't checked at all. No payslips, nothing. We were told that because we weren't claiming to be earning ridiculous amounts, they didn't need to know! (At the time though we were earning £16k and £12k, so perhaps that was part of it)
Did you go through your own bank?When we got our mortgage, our salaries weren't checked at all. No payslips, nothing. We were told that because we weren't claiming to be earning ridiculous amounts, they didn't need to know! (At the time though we were earning £16k and £12k, so perhaps that was part of it)
scotal said:
Did you go through your own bank?
We did go through my partner's bank, so I know what you're saying - they can see her accounts, so it's not a problem. I was the 'main earner' though with my massive £16k a year, and they required no payslips at all from me (and the mortgage wouldn't have been affordable on the £12k salary).okgo said:
OK.
So how many years have you been earning that, how did you prove it?
And also what size deposit did you have for them to offer 4x?
That was based on a deposit of £10k. The meeting was about the new "Save to Buy" scheme that Nationwide have. In 6 months time they'l offer me a 95% mortgage.So how many years have you been earning that, how did you prove it?
And also what size deposit did you have for them to offer 4x?
I asked what they could offer me as a ball park figure, £136k was offered in an unofficial way.
okgo said:
Well actually at current we don't have a deposit.
What does a first time buyer need these days, more than 10% isn't it?
Good to know they do give out a bit more than 3x though, thought we were screwed for years there!
10% will get you a mortgage. The rate isn't all that appealing but its a start.What does a first time buyer need these days, more than 10% isn't it?
Good to know they do give out a bit more than 3x though, thought we were screwed for years there!
There are a couple of 95% loans out there, as you can imagine the rate on them is higher.
However it has to be said that the rates offered aren't that bad compared to historic rates, they just look awful compared to lower LTV rates in the market, or indeed the base rate.
If there are 2 of you then joint income comes into play. i.e. add your incomes together, then work out how much you can borrow.
scotal said:
10% will get you a mortgage. The rate isn't all that appealing but its a start.
There are a couple of 95% loans out there, as you can imagine the rate on them is higher.
However it has to be said that the rates offered aren't that bad compared to historic rates, they just look awful compared to lower LTV rates in the market, or indeed the base rate.
If there are 2 of you then joint income comes into play. i.e. add your incomes together, then work out how much you can borrow.
When you say its a start, what does that mean, it would mean paying over the odds for a long time non?There are a couple of 95% loans out there, as you can imagine the rate on them is higher.
However it has to be said that the rates offered aren't that bad compared to historic rates, they just look awful compared to lower LTV rates in the market, or indeed the base rate.
If there are 2 of you then joint income comes into play. i.e. add your incomes together, then work out how much you can borrow.
Yes it would be doing it as a couple, at the minute we are tracking between £60-70k between us, but have no deposit as yet.
okgo said:
When you say its a start, what does that mean, it would mean paying over the odds for a long time non?
Yes it would be doing it as a couple, at the minute we are tracking between £60-70k between us, but have no deposit as yet.
It would mean you're paying more than you would on a lower LTV, that's all. What has happened though in the last few years is that the rates weren't too bad on 90 and 95% LTV mortgages, but now they're often considerably worse than say 80% LTV.Yes it would be doing it as a couple, at the minute we are tracking between £60-70k between us, but have no deposit as yet.
With £70k between you, I can't see a problem getting a mortgage on a place like you've mentioned. Personally I think I'd try to hold out for somewhere a bit more 'future-proof', as otherwise you end up spending your hard earned changing houses all the time.
king astronomical 
Pulse said:
We did go through my partner's bank, so I know what you're saying - they can see her accounts, so it's not a problem. I was the 'main earner' though with my massive £16k a year, and they required no payslips at all from me (and the mortgage wouldn't have been affordable on the £12k salary).
What was your LTV?Sounds like a Fast Track to me...............
(OKGO, sorry for the thread highjack.)
Scotal, Pulse, are there good rates available for 50% LTV, or is there a % level where it bottoms out for example.
Also, is there any benefit, in terms of the actual interest rate offerd, that can be gained by paying back a mortgage over a shorter term (other than paying back more in interest over a longer term obviously).
Ie. 14 years as opposed to 25 for example? Any companys specialise in this kind of 'medium term' mortgage?
Scotal, Pulse, are there good rates available for 50% LTV, or is there a % level where it bottoms out for example.
Also, is there any benefit, in terms of the actual interest rate offerd, that can be gained by paying back a mortgage over a shorter term (other than paying back more in interest over a longer term obviously).
Ie. 14 years as opposed to 25 for example? Any companys specialise in this kind of 'medium term' mortgage?
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