OK so you have decided to move/buy/remortgage, but like most people starting out don’t know if there are any lenders in the market able/willing to help and the scare stories in the press make it look like there is no-one getting anything.
Well, the first rule is always get a personalised illustration, but here (on today’s criteria) is an overview of what is out in the market for a number of areas.
First Time Buyers.
1. Loan to value (LTV)
- 95% LTV if you have a parent that is willing to act as a guarantor (In England there are lenders that will look at 100% LTV)
- 90% LTV if you are doing on it on your own, but rates get better at 85%
2. If I earn X can I borrow Y?
The old days of getting 4 or even 5 times your income as a ready reckoner are gone, however the better your credit record and the less outstanding debt at the start of your mortgage the more a lender is likely to look at lending you.
Lenders use formulas to say that after bills & debt payments then you can afford to spend an amount of the remaining income on your mortgage.
This is then used to work out if, over your requested term, it equates to your requested loan amount.
To give an idea I have frequently had clients like that borrowing between 4 & 5 times their joint incomes, with higher earners perhaps able to stretch beyond that (do you really want to pay back that much? – you need to know that; and what if rates go up?)
On this you really do need to get your own quotes.
Buy to Let
- Loan to value is available to 80%, although 75% often offers far better rates
- Some lenders have minimum incomes, though 1 large does not
- Experienced landlords get credit for their experience when being underwritten
- Holiday Lets are available
- If you let out room by room then you need a certain type of Buy to Let (called HMO)
- As a ready-reckoner the rent needs to be more than 1/200th of the loan size (this varies from lender to lender – but not hugely)
Poor Credit History
Lending does exist and is available up to 85% (but not in all areas – major cities ok, rural not so easy) and at lower loan to value there is more choice.
Defaults, CCJs, arrears can all be done depending on size, when it happened and overall credit score.
Live Trust Deeds & IVAs currently I could not find a lender to take these cases. If they are historic then give us a call and chat over what you need.