What Income Do I Need For A 400k Mortgage
How much of a salary do I need to get a £400K mortgage?
This will depend, as different lenders have different criteria for determining how much they will lend. If you earn bonuses or commission then some lenders may be happy to take this into account as well as your basic income when calculating how much you can borrow.
The UK's Financial Conduct Authority (FCA) imposes an absolute limit on the number of mortgage loans lenders can issue at a rate greater than 4.5 times an individual's income. (Or 4.5 times a couple's income in a joint application.)
Each quarter, the number of homeowner mortgages they can offer with a higher LTI is capped at 15%.
Some lenders have been using this loophole recently to lend up to 6 times salary to some specific types of mortgage borrowers - including first-time buyers.
Based on a 4.5 times multiple of income you would need an income of £88,888 to get a £400,000 mortgage. However a lender operating to a 5 times income multiple the income you would need would be £80,000.
To find out whether your income situation would be enough to get the mortgage you need, contact our mortgage team.
How much of a deposit do I need to get a £400k mortgage?
The Loan to Value (LTV) of a mortgage is the amount borrowed compared to the size of the deposit put down.
This means that a mortgage with a 10% deposit will have a LTV of 90%. It is important to note that having a larger deposit will increase the amount of products available to you, and decrease the rate of interest you pay on the loan.
If you are buying a house with a 10% deposit and the house price was £444,444 then the mortgage required would be £400k.
Can you get a £400k mortgage with credit issues?
This will depend on what the credit issues were.
As well as your income and the deposit you have, a lender will also take into account any current or previous credit issues you may have or had in determining whether to borrow from you.
If you are unsure then it is a good idea to get a credit report. See here for more information on your credit score and how it could impact your mortgage application.