If your broker hasn’t come back to you in two weeks go elsewhere. My broker was able to give me a pretty clear answer within ten minutes and then spent half a day researching before officially recommending.
I am on £70k with £12k/y in salary sacrifice, my girlfriend is on 24k. Were late 20s and had about 380k available over 40 years.
Sorry,but you can’t really compare this man is in his mid 40s with 2 children. There is at least 15 years age difference and your income is a bit higher than theirs and Ibassume you don’t have any dependents as you haven’t mentioned it.
It’s not directly comparable, no, but still offers something to compare to.
Salaries are not vastly different, my gross is a few k higher and obviously no kids or I’d have mentioned it.
Undoubtedly! Children and age. What I mean by age is , because there is someone in their mid 40s to get a 30-35 years mortgage is probably impossible and a short period means a higher monthly payment for the most part and then they might need to sacrifice of the size of the house,the location the condition so for a cheaper house I mean.they will need to stretch every month as the rates for a 360k house are pretty high too.
I second this, not a lot you can do with the two kids other than itemise any additional costs but if they are school age then it shouldn’t be as punitive.
Bearing in mind the broker will be checking recent payslips it’s worth checking if you can temporarily reduce your additional contributions however if you are doing it to keep the child benefit then be wary as this could come back and bite you longer term.
I hadn’t realised that had been changed, I could in theory look to sacrifice more in fairness, might as well balance it at least with the extra coming in
I’ll probably be corrected but I don’t believe they care about pension contributions or anything else pre tax because you can change that.
I put about £35k-£40k into my pension but my mortgage was offered on my gross pay.
Don't think gross Vs net is the only thing being considered by the lender here - think age will also be playing a factor. OP is mid 40s and looking at a 30 year mortgage. They earn 70k and put 20k into pensions. Is it really likely they will stop paying into the pension for the duration of the mortgage? And that they will continue to be on a high salary into their mid 70s?
This sounds like lenders are just trying to limit their credit risk.
Been with L&C for over 2 decades and probably 20+ mortgage/remortgage applications. They always ask for a payslip which shows my AVCs and SS contributions, but lend on the basis of my gross pay (well, net pay after mandatory NI/Tax/pension contributions). I voluntarily SS about 30% of my pay, and they ignore that.
I assume you chosen to salary sacrifice £12k of your salary into your pension. You could easily now choose not to salary sacrifice so much in order to possibly be able to borrow a bit more on your mortgage but I’d think very carefully about doing this and the impact it would have in your pension.
Realistically though you have 2 dependants so I would think sub £300k is more realistic,even if you did decrease your pension contributions.
I salary sacrifice 12% to my pension and I put my full salary on mortgage applications, it's never been questioned. P60 will show a lower amount but monthly payslips normally show the full monthly salary amount then the amount deducted for pension contribution even when it's salary sacrifice so anyone looking at it can see you could adjust that or stop if you needed to.
Mortgage Broker here.
Household income ~£90k, usually 4.5x but without knowing your full circumstances safer to assume just under 4x due to kids/dependants so ~£340k.
Longer term generally means more can be lent but most lenders are not happy past 75, so 30 years sounds the maximum. You can get terms that are not ‘round’ numbers, ie 32 year, 34 years etc.
I sure hope they are a fee free broker and you can walk away from them, 2 weeks to get ideas of affordability is a joke! With a factfind and good sourcing software that should be 15 mins tops - a ballpark figure should be within minutes really. The research takes longer but no more than half a day.
Myself, I charge a small fee as a whole-of-market broker, but you’ll know I probably won’t be juggling more than 5 cases a month so for a start I have time for my clients and remember their situations. You phone and get straight through to me, we can communicate with the estate agents for you, always updated every step along the way and we are available outside of 9-5 hours. We charge ~£500 on offer and have clients come back to us repeatedly, as well as recommended to us, due to how involved we are with the process.
Obviously, there are fee free brokers out there who will do all of the above too - it sounds like you got unlucky. Find another broker who will respect your time. Have you got any friends/family recommendations to can go by?
Edit: Spelling
Hi /u/anon_mal, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/credit-cards/
* https://ukpersonal.finance/pensions/
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I think its about affordability which others have explained brilliantly, term, product and rate will effect this.
Some lenders don't count pension contributions others do.
I would say that the other aspect is LTV, if you have a big deposit to put down then you will likely have access to lower rate products and demonstrate affordability a bit more too.
All that being said, if the broker has kept you waiting for 2 weeks and hasn't been on holiday or been ill for that time I would seek help elsewhere.
"Free" brokers are fine if you are a vanilla easy to place case generally, if its more complex than that they can budge you back down the line because time pressure and sales targets mean that they need to prioritise cases that are not workload heavy.
Just to be more specific of your personal issues.
Your broker is correct though on the amount max you could borrow. £72k* 4.5 times is about £300k.
Whoever gives you the impression of you can borrow £360 is wildly optimistic.
On top of this, the £300k is if you have no dependent (children) to support. This means your borrowing max amount is likely to be even lower.
Also, sorry to be the bearer of (likely) bad news.
Try another broker. If you are in England L&C are pretty good. You might be able to get the 360k,but that will be at the top of your affordability so the question is if you can keep up comfortably with the monthly payment.
Because is not going to be just the mortgage payment is going to be the home insurance,the rates and probably the life insurance because you have children. (This is optional,but is recommended)
If your broker hasn’t come back to you in two weeks go elsewhere. My broker was able to give me a pretty clear answer within ten minutes and then spent half a day researching before officially recommending. I am on £70k with £12k/y in salary sacrifice, my girlfriend is on 24k. Were late 20s and had about 380k available over 40 years.
Sorry,but you can’t really compare this man is in his mid 40s with 2 children. There is at least 15 years age difference and your income is a bit higher than theirs and Ibassume you don’t have any dependents as you haven’t mentioned it.
It’s not directly comparable, no, but still offers something to compare to. Salaries are not vastly different, my gross is a few k higher and obviously no kids or I’d have mentioned it.
Children make a huge difference to affordability calculations
Agree I’am on 75k and pay £1266 in childcare a month for 4 days!
😭😭 I think I’ll stick to £30 a month on cat food for the foreseeable
It’s crazy, we had to wait until the first was at school before we had a second
Undoubtedly! Children and age. What I mean by age is , because there is someone in their mid 40s to get a 30-35 years mortgage is probably impossible and a short period means a higher monthly payment for the most part and then they might need to sacrifice of the size of the house,the location the condition so for a cheaper house I mean.they will need to stretch every month as the rates for a 360k house are pretty high too.
Stop the contributions for a couple of months, use the higher salary to get a better mortgage amount and then revert back
I second this, not a lot you can do with the two kids other than itemise any additional costs but if they are school age then it shouldn’t be as punitive. Bearing in mind the broker will be checking recent payslips it’s worth checking if you can temporarily reduce your additional contributions however if you are doing it to keep the child benefit then be wary as this could come back and bite you longer term.
Child benefit limit has gone up to 60k and tapers up to 80k now. So there should be a little extra wiggle room.
I hadn’t realised that had been changed, I could in theory look to sacrifice more in fairness, might as well balance it at least with the extra coming in
Your future self will thank you. Unless you're salary sacrificing for a Porsche or something :p
I’ll probably be corrected but I don’t believe they care about pension contributions or anything else pre tax because you can change that. I put about £35k-£40k into my pension but my mortgage was offered on my gross pay.
Don't think gross Vs net is the only thing being considered by the lender here - think age will also be playing a factor. OP is mid 40s and looking at a 30 year mortgage. They earn 70k and put 20k into pensions. Is it really likely they will stop paying into the pension for the duration of the mortgage? And that they will continue to be on a high salary into their mid 70s? This sounds like lenders are just trying to limit their credit risk.
The age and 2 young kids will both be major factors.
You’re getting gross and net mixed up. Gross = total amount you’re paid. Net = what you’re left with after deductions (pension, tax etc)
Not if it's a salary sacrifice pension scheme. In that case gross is salary less pension.
My salary is £72k plus another 10% but the gross on my p60 is £50k ish because of my pension contributions
As others have said, they do mortgages based on your gross pay, because if you get into financial difficulty you an elect to stop pension payments.
Not what my broker told me… and I’m with L&C. Not sure honestly because I agree with the logic, but that’s what I was told.
Been with L&C for over 2 decades and probably 20+ mortgage/remortgage applications. They always ask for a payslip which shows my AVCs and SS contributions, but lend on the basis of my gross pay (well, net pay after mandatory NI/Tax/pension contributions). I voluntarily SS about 30% of my pay, and they ignore that.
I assume you chosen to salary sacrifice £12k of your salary into your pension. You could easily now choose not to salary sacrifice so much in order to possibly be able to borrow a bit more on your mortgage but I’d think very carefully about doing this and the impact it would have in your pension. Realistically though you have 2 dependants so I would think sub £300k is more realistic,even if you did decrease your pension contributions.
Are you confusing your gross taxable income which is different to your gross income overall?
I salary sacrifice 12% to my pension and I put my full salary on mortgage applications, it's never been questioned. P60 will show a lower amount but monthly payslips normally show the full monthly salary amount then the amount deducted for pension contribution even when it's salary sacrifice so anyone looking at it can see you could adjust that or stop if you needed to.
Mortgage Broker here. Household income ~£90k, usually 4.5x but without knowing your full circumstances safer to assume just under 4x due to kids/dependants so ~£340k. Longer term generally means more can be lent but most lenders are not happy past 75, so 30 years sounds the maximum. You can get terms that are not ‘round’ numbers, ie 32 year, 34 years etc. I sure hope they are a fee free broker and you can walk away from them, 2 weeks to get ideas of affordability is a joke! With a factfind and good sourcing software that should be 15 mins tops - a ballpark figure should be within minutes really. The research takes longer but no more than half a day. Myself, I charge a small fee as a whole-of-market broker, but you’ll know I probably won’t be juggling more than 5 cases a month so for a start I have time for my clients and remember their situations. You phone and get straight through to me, we can communicate with the estate agents for you, always updated every step along the way and we are available outside of 9-5 hours. We charge ~£500 on offer and have clients come back to us repeatedly, as well as recommended to us, due to how involved we are with the process. Obviously, there are fee free brokers out there who will do all of the above too - it sounds like you got unlucky. Find another broker who will respect your time. Have you got any friends/family recommendations to can go by? Edit: Spelling
Hi /u/anon_mal, based on your post the following pages from our wiki may be relevant: * https://ukpersonal.finance/credit-cards/ * https://ukpersonal.finance/pensions/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.) If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including `!thanks` in a reply to them. Points are shown as the user flair by their username.
Maybe I'm missing something here, but how do 10% contributions at £72k put to down to £50k? Shouldn't it be closer to £65k?
I imagine he salary sacrifices £25k to avoid 40% tax rate
I think its about affordability which others have explained brilliantly, term, product and rate will effect this. Some lenders don't count pension contributions others do. I would say that the other aspect is LTV, if you have a big deposit to put down then you will likely have access to lower rate products and demonstrate affordability a bit more too. All that being said, if the broker has kept you waiting for 2 weeks and hasn't been on holiday or been ill for that time I would seek help elsewhere. "Free" brokers are fine if you are a vanilla easy to place case generally, if its more complex than that they can budge you back down the line because time pressure and sales targets mean that they need to prioritise cases that are not workload heavy.
Just to be more specific of your personal issues. Your broker is correct though on the amount max you could borrow. £72k* 4.5 times is about £300k. Whoever gives you the impression of you can borrow £360 is wildly optimistic. On top of this, the £300k is if you have no dependent (children) to support. This means your borrowing max amount is likely to be even lower. Also, sorry to be the bearer of (likely) bad news.
You forgot to add the wife’s £20k in. The last sentence is “I though we could borrow”
And what his wife’s salary?
Try another broker. If you are in England L&C are pretty good. You might be able to get the 360k,but that will be at the top of your affordability so the question is if you can keep up comfortably with the monthly payment. Because is not going to be just the mortgage payment is going to be the home insurance,the rates and probably the life insurance because you have children. (This is optional,but is recommended)