HOW MUCH CAN I BORROW?
That’s not an easy one to answer as all mortgage lenders have different attitudes to risk apply their own affordability calculations. There are many mortgage calculators that can give you an idea, but they are normally not much more than a basic multiple of your annual income, but it really isn’t that simple. Lenders will take into account all of the following when calculating their maximum figure:
- Your occupation
- Basic salary
- Overtime, bonus, commission and whether paid annually, quarterly or monthly
- Dividend income for limited company directors
- Credit commitments such as credit cards and loans
- Student loans
- If a leasehold property the ground rent and service charges
- Any ongoing maintenance payments
- Other mortgage payments
- The number of years you need to take the mortgage over
- Whether a tracker rate or longer term fixed rate (yes, some lenders will offer more if you will be applying for a 5 year fixed rate or longer)
- The amount of deposit you have
- Do you have a good financial track record?
- Do you have a poor financial track record?
Believe it or not this is not the entire list. But hopefully it gives you a good idea that there can be quite a lot of variance.
The good news of course, is that this is one of the many reasons to use a mortgage broker such as ourselves. We will find out about you and your plans, do all the hard work for you and then report back with options!