How Much Can You Borrow
How much can you borrow is a question that often comes up with mortgages, so we can provide you with the assistance you need on determining your mortgage borrowing ability.
When it comes to borrowing money on mortgages you should only borrow what you can comfortably afford to repay. You need to consider all of your important expenditure and plan your mortgage repayments carefully and sensibly.
Most lenders use an ‘affordability’ based calculation sometimes with a maximum income multiple based cap (3 to 5 times your gross wage after taking into account any loans or credit cards and sometimes other commitments like pensions, travel costs, childcare and property-related costs too).
Either way, they will not usually take all the elements of your income into account e.g. they may only take half of overtime or second jobs into the calculation. They all have different approaches to proof of income, and some will want the last three months’ payslips to prove overtime and extra payments whereas others will use P60 information to ascertain the level they will include.
Please call us so that we can discuss accurately what you would be able to borrow (and afford!) and assess mortgage borrowing ability.
We prefer not to have a lending calculator on our website because of the vast difference in amounts lenders will lend and the way that they each consider how to do so. Be aware that the calculators that are on the banks and building societies public websites tend to be inaccurate, in any case, you would need to know what attitude to your income the lender had to be able to get an accurate result.
The best way for us to tell you how much you can borrow is to arrange an appointment where we can review your situation properly. Our service will ensure that you are well informed about the complications of borrowing more on mortgages. Of course, in doing so we can tell you what multiple lenders will lend at the same time, something your bank will never do!
We can also obtain an agreement in principle (AIP) also sometimes referred to as a decision in principle from a lender before you start to look at properties. This will help strengthen your position when it comes to contacting estate agents and also reassure you that a mortgage is obtainable.
How Much Can You Afford?
You should sit down and work out what you expect the monthly bills to be including any travel costs, existing credit commitments, food etc. Do not forget that interest rates could increase in the future so whatever the cost of the mortgage initially may not stay the same in the long term.
You should also factor in extra costs for protection i.e. life & critical illness cover, accident, sickness, unemployment and buildings and contents cover too. We will cover all of these with you in a typical meeting and give you an idea of cost quoting form the ‘whole market’. Other costs you may have incurred such as home valuations and mortgage advisor fees should also be included when figuring out the costs of buying a home as well.
If you have any questions about borrowing on mortgages our mortgage advisors can provide you with the guidance you require. Contact us today for further information on getting a mortgage loan or use our monthly mortgage costs calculator to work how much you can afford to borrow.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up the repayments on your mortgage.
Mortgages from over 50 lenders
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“Stuart and Sharon have arranged a buy-to-let mortgage, a mortgage for our first home together, a re-mortgage and have now helped us port over our mortgage to a new house. The service they have provided has been consistently amazing, especially as our purchases have never been straight forward. I would recommend them to anyone.” Dominic, Surrey
“Stuart was recommended to me by a friend and I would certainly continue that recommendation. He is very thorough and ensures you know all the options. Stuart makes the process clear and you feel informed the whole way. Thanks Stuart” Danielle C, Hemel Hempstead
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