Finding out how much you can borrow may feel like a gruelling task, especially with borrowing now a lot more complex than a simple multiplication of your salary, which was the previous way mortgage providers used to work out how much you they are willing to lend you.
Our calculator also uses a simple multiplication to give you a measure of how much you could potentially borrow, which is a great starting point. However when it comes to making an application mortgage lenders will also look at these key factors:
Your deposit / Equity
An important factor with lending is how much you can initially put down as a deposit, or if you’re re-mortgaging as equity. Lenders will want to know how much you can put forward, as this will influence what you can afford, and what lenders will consider lending you.
Please don’t be convinced by the press’ take on these new checks. You’re not in for a 10 hour grilling on why you spent £10.00 in Tescos last month. Not at all. These checks are to ensure that although your salary may be sufficient, it’s not all being spent on other commitments, meaning you can’t truly afford your mortgage repayments. Lenders will be checking your debt payments, and other commitments like memberships, childcare and vehicle costs. Preparing a few months in advance to show your lenders good money management will help balance out any commitments you have.
Once a lender understands you annual income, your current financial commitments and your initial deposit / equity amount, they will be able to more accurately calculate how much they are willing to lend.
How does a mortgage broker help with this?
By finding this information out, we can search the entire market for deals that suit your financial situations, and liaise with a number of lenders to find you the best deal, we streamline the entire process so you can have all your options on the table before making one of life’s biggest choices. All whilst having an expert sat right by your side.
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