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2 X Annual Salary Mortgage With Well Known High Street Building Society


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He says it will take him years to save the difference whilst renting and he showed them that he could easily afford the repayments because he gets regular overtime and an annual bonus every year which is about 20% of his wage. (which they said they couldn't include). Feel so sorry for him.

He is now worried that applying for a different mortgage will result in more credit checks and actually ruin his credit report.

Until he doesn't. I think he's had a lucky escape.

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Counts for nothing. I had regular overtime until last Autumn, now I get none.

+1

Banks won't take intop account anything other than basic salary as overtime/commission is not guaranteed and can disappear over night. If someone on mumsnet said they were given a mortgage based on their overtime, and now can't afford the repayments... they'd get slaughtered on here!!!

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If the banks go back to 2 X salary then they will engineer a housing crash within a year. Surely this is not in their interests?

At best, the market will just stagnate.

better to make 20 loans of 50K than 5 loans of £139K

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He is 33 years old ...so not that young and he is always very careful with money.

Is he a bit too careful?

My brother got turned down on his first mortgage application in 2001 because he'd never had a credit card or a loan, and therefore no proven track record of paying back borrowed money. He was putting down a 20% deposit..

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Brother has just told me that he was offered only 2 times his annual salary this afternoon. A bit of background information, he is a ftb, married with one child, and was going to put down 10%. The mortgage deal is very good. His credit checks all came back fine. He thought he was in a good position. The building society told him if he applied a month or so ago, he would have been able to get 3.5 times his salary.

He forgot to ask why things had changed.... Now he is stuck. The decent properties in his area start around 3x his annual salary. He says it will take him years to save the difference whilst renting and he showed them that he could easily afford the repayments because he gets regular overtime and an annual bonus every year which is about 20% of his wage. (which they said they couldn't include). Feel so sorry for him.

He is now worried that applying for a different mortgage will result in more credit checks and actually ruin his credit report.

Anyone else having trouble getting a mortgage?

After yesterdays report on deflationary wage rises i think lenders are going to be frightened about when these wage squeezes are going to stop. They are going to play it on the safe side i suspect. Buyers in the long term will be better of as prices will have to fall.

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Is he a bit too careful?

My brother got turned down on his first mortgage application in 2001 because he'd never had a credit card or a loan, and therefore no proven track record of paying back borrowed money. He was putting down a 20% deposit..

A proven track record of managing your finances sensibly enough to not need borrowed money should show that you're safe IMO.

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If the banks go back to 2 X salary then they will engineer a housing crash within a year. Surely this is not in their interests?

An example of "local optimisation". The individual lender is protecting its own interests while letting others prop up the market with looser lending. Its the same reasoning behind outsourcing - companies are not thinking about the detrimental effect they will have on the wider market.

Edited by goldbug9999
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I'm a bear, but this is starting to sound unlikely to me, nominally anyway.

It will happen for the simple reason that it will not be possible to cause enough inflation in a short enough timeframe to support house prices at their current levels.

Indeed, since pay rises lag inflation (which lags money printing) the current cycle of inflation is putting pressure on house prices due to disposable incomes falling for (non-banking industry) wage earners.

(Parts of London might be a different case since it's full of bankers sporting freshly printed money looking for suitable assets to get the money into before all the printing devalues it.)

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Anyone else having trouble getting a mortgage?

I thought all this fixed income multiple 'nonsense' was done away with by the lenders? Is it not the case that all applications are (still) worked out by an affordability assessment of income vs. outgoings?

I am off for a visit to an IFA soon and I was hoping for 4x Income plus a bit for my partner... am I in for a dissapointment?

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I thought all this fixed income multiple 'nonsense' was done away with by the lenders? Is it not the case that all applications are (still) worked out by an affordability assessment of income vs. outgoings?

I am off for a visit to an IFA soon and I was hoping for 4x Income plus a bit for my partner... am I in for a dissapointment?

Man A

income 20k outgoings 15k

save £5 a year for 4 years. so you have £20k deposit.

How much mortgage do you think they should be allowed?

Man B

income 50k outgoings 45k

save £5 a year for 4 years. so you have £20k deposit.

How much mortgage do you think they should be allowed?

The i/o one would say the same amount?

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I thought all this fixed income multiple 'nonsense' was done away with by the lenders? Is it not the case that all applications are (still) worked out by an affordability assessment of income vs. outgoings?

I am off for a visit to an IFA soon and I was hoping for 4x Income plus a bit for my partner... am I in for a dissapointment?

Affordability... My brother says the maximum they would lend him equates to 25% of his basic disposable income (basic pay). I told him I thought the rule was not to spend more than 40% of your disposable income on a mortgage.

He has no loans whatsoever, he owns his car outright, he uses his credit cards every month and pays them off as soon as the bill comes in. He has an awful lot of shares, should he have mentioned this? I told him to tell them everything, but I'm not expert. He didn't mention his shares.:huh:

Edited by Barb E Dahl
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Well might be the case for this person but I am still offered 5x combined salaries without any issue when all I was enquiring about was "what if " I needed a mortgage for 2.5x our combined salaries.

Frankly I don't think that things have changed that much and even if I would have loved to see price crashing I don't think that will happen anymore.

My views are that property prices will go down by 10/15% again over the next couple of year, then stagnate for another couple of years and then whooopa here we go again for another bubble.

Yet again who am I to know what is going to happen, something might make be changed my mind next month.

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Well might be the case for this person but I am still offered 5x combined salaries without any issue when all I was enquiring about was "what if " I needed a mortgage fsnip

any EA will tell you that.

Now, how about some real applications

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