Posted on 21 June 2014 by A Harris
I have been a company director of a company I formed in November 2012 following being a sole trader doing the same profession since 1995. I am taking annual dividends of about £30,000 a year and a wage of £10,000 a year, my husband has an income of £30,000 a year employed and has been at the same company for 17 years.
We have equity of £250,000 and are looking at property of up to £400,000 but although both our credit ratings are good we have joint loans and credit card debits of £52,000, including car loans. We have annual private school fees of £26,000 to pay. What are our chances of getting a mortgage (our present one is £152,000) and our house is worth £375,000-£390,000. Thankyou for your help.
Despite the quite high level of personal unsecured debt in relation to your joint income and the school fees, you should still be able to get a mortgage. The actual amount is the big question.
In April this year the regulator introduced a number of new rules under its Mortgage Market Review, and one of the main ones was that lenders no longer use salary multiples, and instead have to work on affordability. Each lender has a slightly different way of calculating affordability, but areas like unsecured debt and school fees do have a big impact on the overall loan size.
We'd really need to go through a fact find with you, and then go to research which lenders affordability calculations will be able to offer you the level of mortgage you are looking for. There is one very good point in yourfavour and that is the £250,000 equity that you'd have to put into the deal.
If you'd like to discuss your options in more detail, then please contact one of our consultants on 0344 346 3672 and they'll be able to give you a clearer idea of how we can help.
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