Move South! 🙂

I’m a northerner…this is as far as I go!

There’s a significant difference in being able to afford something, and being willing to pay something; I don’t want to throw away £18000 over 5 years.”

If your credit card debts take you from 85% to 90%LTV I’d put them at around £17K (5% of 350K). To be blunt, as you seem to be, you can’t afford a 85% LTV, so accept a 90% LTV or save up some more.

Wow that’s high! Even when we were both FT our monthly bill was 854 for our first. That was a childminder though. Not sure what nurseries cost in our area as I didn’t look at any (not many that I could get to with the times we needed and those I could didn’t have a great rep).

Obviously, a childminder would’ve been cheaper, but then who watches the watchmen?

Ofsted, same as nurseries.

Different debate though I’m with MrsF on this (and welcome back 🙂 )

tonyg2003 – Member

If your credit card debts take you from 85% to 90%LTV I’d put them at around £17K (5% of 350K). To be blunt, as you seem to be, you can’t afford a 85% LTV, so accept a 90% LTV or save up some more.

No, my £4K of credit card debt simply moves me off the 85% LTV step. It changes the LTV to 86.5%, but it’s a step change that moves you directly onto a 90% LTV Mortgage; there is no in-between value.

By paying off the £4k of debt, I will be allowed to borrow more, true, but not much more as the monthly repayment minimum is usually around 3% (i’m guessing here as I don’t know) which equates to around £120pm. By reducing my LTV I’m going to have to pay an additional £300pm in mortgage interest…

Over two years, the money saved in interest alone by NOT clearing the cards is enough to actually clear the card debt.

I’m not arguing the point that having the card is a detriment to the total amount I can, borrow; what I’m arguing, is that surely a lower LTV (more personal equity in the property) is a bigger +ve point than the card debt is a negative. Don’t you agree?

Apologies, I am quite blunt.

A quick Google suggests that of the 5 nurseries near to me, the Day rate for 2-3 year olds ranges from £47-£58 per day. I pay £50.

Childminder rates start at £4 per hour. for the same TnCs as my nursary, that would only save me £7.10 per day or £140 per month. Considering, that not many accept Childcare Vouchers…the difference is negligible.

There’s also more reliability in a nursery, sickness, holiday, etc.

No denying it’s expensive, but that’s the cost of childcare in Bristol.

I’m not arguing the point that having the card is a detriment to the total amount I can, borrow; what I’m arguing, is that surely a lower LTV (more personal equity in the property) is a bigger +ve point than the card debt is a negative. Don’t you agree?

That then comes back to how the lender judges things – LTV vs. affordability when offering a loan, as this is the step you’re falling over on.

So you’re back to saving more or shopping around I’m afraid. Your logic is sound, but it’s not me you have to persuade 😉

Having lived on a 6% mortgage of £197000 for 5 years I’m proof it’s possible to live at what might seem ‘beyond your means’ but it does mean sacrifices in other areas of your life. If you can live with that (home for life and all that) then go for it (when you get the chance!).

Most childminders do accept childcare vouchers FWIW – or at least those doing it properly (eg declaring income, etc) at least IME since that was one of the things we asked.

To get back to the OPs point, we’ve just had the underwriter significantly reduce the amount the bank had agreed to lend us. Apparently using the new rules they are making some very conservative assumptions about the state of the economy and our earnings five years from now.

I hope that we’ve picked a very conservative lender, and so will be shopping around for other options.

I’ve been told that there are many people in the same boat, and now really wished we’d found the right house three months ago!

Any childminder should accept all vouchers, it’s dead easy to set up (have just gone through it again as have changed cm). you are right on the reliabilty / sickness etc.

But we’re sidetracking (although that £140 a month may tip the balance for a lender?) 😉

ps thank you nemesis.

Got my last mortgage 7 years ago but used an IFA then to get best deal, would one not help with finding the most generous lenders? I suppose there’s a cost to using one now.

I’ve been told that there are many people in the same boat, and now really wished we’d found the right house three months ago!

I suspect you’ll find the recent bounce with asking prices was people trying to get in before the lending restrictions – which sellers and estate agents took advantage of, hence people overpaying.

With MMR now in place, further lending restrictions likely to come in June and interest rates rise(s) poss early next year, you’ll likely find yourself in a stronger position in 6/12 months time when it comes to negotiating the price down as sellers will not be in such a strong position (fewer buyers able to borrow so much) + you’ll presumably have a bigger deposit saved.

This might well mean you get to pay less because you’ve waited..

Not having a go, but it’s sentiment like the one you’ve expressed that estate agents and sellers have been exploiting these last few months…

Apologies, I am quite blunt

I like blunt. Good luck with your application. It does seem crazy change in loan amount offerred. I think that this might be just your lender saying “we don’t want you”. Time to move on and find a more flexible lender.

brooess – Member
I suspect you’ll find the recent bounce with asking prices was people trying to get in before the lending restrictions – which sellers and estate agents took advantage of, hence people overpaying.

With MMR now in place, further lending restrictions likely to come in June and interest rates rise(s) poss early next year, you’ll likely find yourself in a stronger position in 6/12 months time when it comes to negotiating the price down as sellers will not be in such a strong position (fewer buyers able to borrow so much) + you’ll presumably have a bigger deposit saved.

I totally agree that what you’re saying is what should happen, but will it?

We were looking for a house (in another part of the country) in 2010 and found that the vast majority of sellers were holding out for the valuations the estate agents had given in 2008/9. If the offers were well below this, they simply removed their properties from the market until things “got better” or rented them out.

My (admittedly) limited experience of the property market seems to indicate that lenders and buyers are forced to reassess their circumstances immediately in response to changes in rates, values, lending criteria. Vendors take a LOT longer to adjust to a changing situation which reduces the perceived value of the home they’re currently in.

This is especially true of those who’ve moved house in the past 8 years.

Generally (and purely from an observers POV), what seems to happen is that rather then devaluation, you have a market contraction (less properties for sale) but those properties which are are still for sale are selling at the value established in the boom times, thereby establishing a precedent. There are always just enough people, who’ve managed to get money/means together to meet the market, and just enough properties for sale to furnish them.

This is from both experience and observation.

I’ve given up hope that the market price will reduce more than a few percent.

I’ve given up hope that the market price will reduce more than a few percent.

Well I’m wondering that too, but no-one expected the crash in 2007/8 nor the earlier one in the early 90’s… and many senior and sensible people are going public at Gideon to stop ramping up prices, because any shock to consumer confidence right now from a fall in house prices will kill the ‘recovery’ stone dead

One sure sign of a bubble is that everyone expects prices to keep going up…

no-one expected the crash in 2007/8

Not sure about Bristol but in London the 2008 “crash” consisted of prices dropping by up to 15% at most, then two years later completely recovered and heading up ever since (source).

Not much of a crash, and as long as you weren’t planning to move for two years you were laughing even if you bought at the height of the peak before the crash.

My opinion is that if you are looking to buy in a desirable area then it is always better to buy sooner rather than later.

Bath:

Bath – House Prices 2006 – Present

Bristol:

Bristol House Prices 2006 – Present

During my recent house purchase, my student loan came into question as an affordability factor as it was deducted from my salary and showed up on pay slips. This wasn’t an issue until the underwriter picked up on it and reduced the amount I could borrow.

Luckily I could pay that £7k debt off and continue with the purchase.

Ask your mortgage provider exactly what it is that has reduced what they will lend you. As has been said before, different lenders have different criteria which changes all the time.

It this the governments way of cooling the market without actually putting the interest rates up to stop the housing bubble from popping before the next election.

They can’t afford to risk a real interest rate rise or the country will be on it’s knees.

After all they own a lot of the banks now if the market crashes all the property on the balance sheet could take them down.

I’m in the middle of a house purchase and the lender is asking all sorts of questions, and the whole process is taking longer. I have no loans, no debts, no credit cards, not selling anything, a 30% deposit and want a mortgage of £100K, which is considerably less than half what I could’ve borrowed and still it’s taking ages! Not satisfied with 3 payslips and 4 bank statements to prove who pays my salary, they also want direct proof from HR, who are massively understaffed and a bit crap so haven’t got round to it.

We just went through ‘new system’, without it being official as Leeds wanted to inflict it on someone it seems – and it was our unlucky day.
In the end, it made no difference to what we were offered. And common sense prevailed that the mortgage is £120 a month less than we were paying in rent for the last year, and same as we were paying for the last 6 years on 30% less salary.
I also agree that house sales/prices are bearing no resemblance to reality in some ways up here. I think people look at Zoopla price guides and assume it is correct. Or as someone mentioned earlier – a house not sold for 5 years as appreciated in value apparently – we bid on one here, and were told to offer more…
The one we just got keys to last week had also marketed at ‘offers over £190k’, but neither they or estate agent 🙄 appreciated that in new / old scheme most lenders will only lend on the lowest figure of valuation/offer/marketed figure. Anything more is out of your deposit, pushing up LTV or deposit size. So their expectation that they should get £220k+ for that house was quickly scuppered….