A mortgage at my age! in The AnswerBank: Business & Finance

You will cerainly be able to get a 13 year mortgage possibly a 18 year mortgage. A longer period will be difficult if you do not have a private pension which would give you �15k a year. Ther 'average' lender would give you 3.5 times your salsry bu tthis can vary.

try www.fool.co.uk or www.moneyfacts.co.uk both these sites have mortgage calculators.

pattie5853

Question Author

Thanks for your speedy reply! It was a great help.

Oneeyedvic

More than welcome

5029

Lenders are now lending up to 5 or 6 times your salary, as house prices have risen so much. A friend of mine on �16.5K was able to get a �80K mortgage and manages to pay it fine, things have changed a lot recently in the property market!

pattie5853

Question Author

Thanks 5029 I will definitly look into getting a mortgage now.

Oneeyedvic

I would point out that lending 5 or 6 times salary is very irresponsible, and no lender will openly lend that amount - they will only allow it by self certification - ie you have to lie on your application form!

Bear in mind that if interest rates increase, you can be very stuck.

5029

I have to disagree with oneyedvic, most lenders will lend this, if you go to an independent mortgage advisor, they will give you a list of all places that offer mortgages and how much they lend, the vast majority of which will offer 5 times your salary.

Miss Zippy

Unfortunately there are some lenders offering ridiculously high income multiples. If someone on �15k is offered, say, 5 times their income - a �75k mortgage - this will equate to monthly payments of around �420 per month on a standard rate mortgage. On a salary of �15k, you are taking home around �900 per month so �420 is a hefty amount out of your salary (unless you're already used to paying this amount in rent, in which case you could probably manage), bearing in mind all your other bills on top.

Miss Zippy

My sum of �420 above is based on a 25 year mortgage and would obviously be quite a bit higher on a shorter term mortgage.

Oneeyedvic

5029 - curious as to where you get your information from - amazing that people seem so keen to spout rubbish without any kind of backup / proof.

If you go to the following lenders own websites, they all have their own mortgage calculators and tell you how much you can borrow - the figure in brackets is what they will lend you compared to your income:

Abbey National (3.6), Alliance & Leicester (3.5), Barclays (4.0), Bradford & Bingley (4.0), Halifax (3.25), HSBC (3.75), Nationwide (3.5), Natwest (3.75), Northern Rock (3.5), RBOS (3.75), The One Account (3.75).

The only major company that does not seem to have an income multiplier on their website is Lloyds TSB (Cheltenham & Gloucester).

The above works out to an average of 3.67. By my reckoning,Lloyds TSB would have to lend around 20 x income to get teh average up to 5 x income that 5029 states is normal!

These are the major institutions and lend over 80% of all money secured by land.

I would suggest that the IFA that 5029 is referring to is someone who is suggesting that you exagerate your earnings and go self cert. As I said, this is not only illegal but reckless. These income multiples are there for a reason - the fact that you do not get repossessed easily.

Afordability is a key, and most lenders will take this into account. Also note that with only 13 years of normal income level, your choices are more restricted.

funkychicken

at the nottingham building society they will lend up to four times your salary, well they did for my dad anyway

5029

Oneeyevic - the "rubbish I am spouting" came from an independent mortgage advisor (as stated above), from when I went to see about getting myself a mortgage just before christmas. They stated that as house prices were rising so much faster than incomes, the lenders were now lending up to 5 times the salary.

Where do you get your facts from? What you are saying seems to have been true maybe 10 years ago, but very out of date now

5029

Also, your suggestion above is wrong, they do not in any way encourage you to exaggerate your earnings! As you yourself said, it is illegal, and the banks request pay slips so they would discover the lie

Oneeyedvic

Sorry, as I said go to all the bank's own websites - that is where i got the information from, so unless the banks have not updated their own sites in 10 years, my information is 100% accurate.

As I said, what you are spouting is rubbish. You already seemed to have changed your opinion from 5 to 6 times your salary to 5 times your salary.

Spend 10 minutes on the net, go onto each lenders website and look for a mortgage calculator - very easy to do. Here is an exmaple for you:http://www.natwest.com/natwesttools/mortgages/mc_lend.st m

All the aboce listed companies will have a section where you can enter your salary and they will tell you what they will loan you - with the exception of Lloyds TSB. This is how I got the above figures. Show me a link to any site that will lend you 5 times your salary 'as a standard' as you put it.

Think you will find that you can't!

My suggestion that some bad IFAs can get you to exagerate your earnings is also true and has been investigated by people like Watchdog. Banks also do not always ask for payslips - especially not in self certification cases as I noted in my previous answer.

From what you are saying, you obviously have no clue as to how the Financial Serives industry operate but are giving 'advice' on 'what you have heard'.

Daisy Lily

Go for it. I'm 60 (and in Canada) but twelve months ago I got a 75% mortgage on a little hovel which cost me $58,000.00 (probably the cheapest house in Ontario). I also (hush) borrowed the deposit, (ex hubbie owes me rather a lot of money) and now I'm working two jobs totalling 70 plus hours and am so happy. Good luck.

5029

Oneeyedvic - I am not spouting rubbish, it was not an IFA i went to it was an IMA. You are obviously convinced that you are right and therefore know more about the information that the banks and building societies give out than they do themselves.

The IMAs are heavily regulated and are able to provide information from banks building societies etc to state how much they will lend, which is what they showed me when I went for advice on getting a mortgage.

If i am spouting rubbish how do you explain that my boyfriend as well as several close friends of mine have been able to get these mortgages without lying about their income?????

Apologies Pattie that your post has come down to a petty argument, but some people are unable to accept personal experience from others attributin it to them talking rubbish.

Oneeyedvic

Firstly, my apologies for hijacking this question, but it really annoys me when people who have no industry experience try giving advice that is both misleading and inaccurate.

Since 31st October 2004, the FSA (Financial Services Authority) is responsible for regulating the mortgage market. Their advice on borrowings is as follows: http://www.fsa.gov.uk/consumer/07_MORTGAGES/getting_started/borrow.html

In 2003 (latest figures available) the top 7 mortgage lending companies were as follows:
(1) HBOS (commonly known as Halifax / Bank of Scotland. They are responsible for an estimated 26% of all mortgages equivalent to �70.3 Billion in 2003.
(2) Abbey National � � 29.1 Billion lent out in 2003 � share 10.7%
(3) Nationwide - � 24.4 Billion � 9.0%
(4) Lloyds TSB - � 24.2 Billion � 8.9%
(5) Barclays - �28.3 Billion � 6.8%
(6) Northern Rock � 15.2 Billion � 5.6%
(7) Royal Bank of Scotland �14.0 Billion � 5.2%

Between the above 7 companies, that incorporates over 70% of the mortgage market. � This is from the Council of Mortgage Lenders website � www.cml.org.uk

Cont.

Oneeyedvic

Cont.
As I explained earlier, you can go to each of these lenders websites and look for a mortgage calculator (with the exception of Lloyds TSB). The links are as follows:
http://www.halifax.co.uk/mortgages/howmuchcaniborrow.sht ml

http://www.abbey.com/index/home/mortgages_inde x.htm

https://olb2.nationet.com/applications/modo lpreapplyui/start.aspx?DEST=AFF

http://www.barcla ysmicrosites.co.uk/mortgage_calculator/

http://ww w.rbs.co.uk/Personal_Finances/Mortgages/Mortgage_Calcula tors/borrow.asp

http://www.northernrock.co.uk/mor tgages/calculator/

Therefore the information I am giving is as up to date as possible. If you have an IMA / IFA in your local area that is giving people advice that he can get an average person a mortgage of 5 or 6 times there salary (and I suspect that you didn�t read Pattie�s original question and spot the fact that they are 52) then I will be prepared to put money on the fact that they will not be trading within a year.

As I continually state on this site, If you have no clue about what you are talking about, don�t answer the question. It is misleading, inaccurate and can give false hope to people.

I state that you have no clue as you are suggesting that a 52 year old on a salary of �15,000 a year may be able to achieve a mortgage higher than they can afford. If you know of an IFA who would suggest that Pattie could get a mortgage with a 5 / 6 salary, please ask for their FSA number � I would love to know.

Compostella

People!!!!

Calm down

Oneeyedvic, you are partially right, but you are talking about normal mortgages for the masses. The figures you have quoted are indeed true but there is 20% of the market that is out of 'mainstream' mortgages.

There are mountains of options available to pattie5853, and he/she should see a IMA to discuss as there are other factors than borrowing ratios to account for.

Don't get hung up on the normal way of doing things, get flexible and keep up with the market!

scorpio61

This looks like a really lively one to get into, but I'm probably too late!! Pattie, if your credit history is ok, go see someone like the RBS, talk to them, get the info you need and leave, then go to other neighboring banks and do the same. It's more time consuming than the web but if you are a first time buyer or you've been out of the market for some time you need to "TALK" to the professionals. This is a major decision in your life and with all due respect, if you get it wrong you�re not really in a position to recover from it.
I deal with mortgage companies on a daily basis and today, provided you have a high credit score, you can borrow 4.3 times your income, 100% loan to value of the property over 22 years. On a repayment mortgage (which they would insist on) this equates to a �64,000 mortgage paying approx �450 a month, but they would insist that you make a written commitment that you intend to work into your retirement.
All due respects to everyone on this, oneeyedvic had some valid points and he is right to point out the issue�s he did especially when it comes down to comparing �experiences�, it cannot be stressed enough that each application for each person is handled differently by each lender. I put two mortgage applications through to a lender, one applicant had a �7,500 CCJ and the other a �70 default with BT, believe it or not, the one with the default was the one that got rejected!!!!

Pete (Debt Practitioner)
M.D. Chambers Moore Ltd
www.chambersmoore.co.uk

A mortgage at my age!

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