The
amount you can borrow will vary between lenders but the rule
of thumb is three and a half times your annual earnings.
You
may get up to four times your earnings, particulalry
if you have a good mortgage broker.
For
a couple buying together typical variations would include:
Couple 1: two and a half times both annual incomes.
Couple
2:
three to three and a half times the greater income plus one
year of the second income.
You
can check out our couple's calculator,
to see how much you can borrow.
Here's
a secret
Assuming
you have a regular income and clean credit history you're likely
to get a loan fairly easily.
Despite the impression you may be given that you've got to jump
through the hoops, the competition between lenders to
get your business is fierce.
Some
lenders now use more sophisticated credit rating methods, where
they examine your income and your outgoings.
The idea is that every borrower has unique circumstances.
Someone with teenage children and high outgoings can't afford
to borrow as much as a singleton earning the same salary.
Sometimes people are lent five times income.
The
quickest way to find out how much you can borrow is
to ask an experienced, independent mortgage adviser. They
usually have long standing relationships with the mortgage lenders
and know exactly what you can stretch to. We can put you in
contact with an independent regulated one from here
click here to get this now
2) How much the property is worth.
Most lenders will loan up to 75% of the property's value. (This
is known as the loan
to value ratio )
Some
will lend up to 90 or 95% of the property's value.
Some
will let you have up to 100% ie a 100%
mortgage - but you'll pay over the odds - ie a higher interest
rate for this
A
few mortgage lenders will even lend you more than 100%
but special rules will apply.
Depending
on the area you want to buy in, the lender
may refuse a loan, for example if they feel the property isn't
expensive enough for the area.
More often, it's the opposite case - where a property is seen
as too expensive.
Some
mortgage lenders will put a limit on the amount they'll allow
on certain types of property. For example thatch
roofed, timber framed.... and houseboats? Well that's a whole
different deal.
3) How much the mortgage lender thinks you can afford
You
may be able to get a mortgage which stretches your budget to
the limit but leaves you in trouble when you have to pay the
other costs involved in
buying your homeand
its future running costs
Some lenders will want to estimate this by checking your average
outgoings eg your household bills, any debts etc. Some will
get you to fill in a detailed questionnaire either by hand or
on the phone or online etc.
If
you're a first
time buyerit will always help if you can show you've
been paying regular rent for a similar amount to what your intended
mortgage payments will be.
Want
to talk
with a mortgage adviser who specialises in helping First Time
Buyers?
We can put you in contact with a professional mortgage adviser
who will find
you your best mortgage. It's free and completely
confidential. Simply fill out the form below
