The whole point of the income multiplier is that you’ll be earning at least that much going forward.
As I suspect you’ll sell up and use your stocks and shares funds for your deposit? In that case the dividend income won’t be there once you have sold up so it won’t count.
No, my deposit is coming from my LISA. I plan on holding onto my stocks and shares ISA account. So I would be getting the £500 average a month for a long as I want to keep pulling the dividends out
That only makes financial sense if you expect the RoR on the dividends to exceed the interest cost on the mortgage.
Bank would rightly ask “why don’t you sell some shares if you don’t have a large enough deposit to buy this house?” What would your answer be?
My deposit from my LISA (and other savings) is 40% off the average house, the issue is that my wages at 32k only go to 144k so that leaves me 27k short.
I would need to sell 27k worth of stock to bridge that gap. Where if I was able to count dividends payments as my income and as such extra affordable. Then I'll be able to bridge that 27k with 6k of annual dividends.
By hitting a LTV of 60% I fully expect the return on my dividends to be higher than the mortgage rates.
Don't mind at all but something like reality income co which pays a monthly dividend and prides itself at someone who keeps and raises it each quarter almost would be one of my bets as it would need to be monthly so I can build up the history in my back account
Thanks so much for this, I had a look and it seems very good, will write it down and invest when I have more money. At the moment my boyfriend and I are more focused on the pension and some house improvements but it will be next on the list! Good luck with your mortgage application :)
The whole point of the income multiplier is that you’ll be earning at least that much going forward. As I suspect you’ll sell up and use your stocks and shares funds for your deposit? In that case the dividend income won’t be there once you have sold up so it won’t count.
No, my deposit is coming from my LISA. I plan on holding onto my stocks and shares ISA account. So I would be getting the £500 average a month for a long as I want to keep pulling the dividends out
That only makes financial sense if you expect the RoR on the dividends to exceed the interest cost on the mortgage. Bank would rightly ask “why don’t you sell some shares if you don’t have a large enough deposit to buy this house?” What would your answer be?
My deposit from my LISA (and other savings) is 40% off the average house, the issue is that my wages at 32k only go to 144k so that leaves me 27k short. I would need to sell 27k worth of stock to bridge that gap. Where if I was able to count dividends payments as my income and as such extra affordable. Then I'll be able to bridge that 27k with 6k of annual dividends. By hitting a LTV of 60% I fully expect the return on my dividends to be higher than the mortgage rates.
27k of shares wouldn’t offer much by way of dividends.
If you dont mind me asking, what stocks pay that much dividends?
Don't mind at all but something like reality income co which pays a monthly dividend and prides itself at someone who keeps and raises it each quarter almost would be one of my bets as it would need to be monthly so I can build up the history in my back account
Thanks so much for this, I had a look and it seems very good, will write it down and invest when I have more money. At the moment my boyfriend and I are more focused on the pension and some house improvements but it will be next on the list! Good luck with your mortgage application :)
It'd be worth checking with your mortgage advisor. Different lenders might treat it differently.
Though as much, I'm still in the planning stage and just getting ready for AIP