Mortgage Affordability

Mortgage Affordability

The Affordability of a mortgage is really down to two matters. The size of your income and the size if your deposit.
There are lots of decisions you’ll need to make when shopping around for a mortgage are you after flexibility, a fixed or variable rate? and which lender is offering low arrangement fees.

But as a first time buyer in the current climate what it really comes down to is which lender will lend the most money.

A few years ago first time borrowers had the luxury of choosing the best rate and the deal that would ultimately suit them. But right the one of your main should be who will lend me the most money at the most affordable price.

Mortgage Loan Criteria

Mortgage lenders each have their own criteria for evaluating whether you are an acceptable risk for them.

Every one of us lead a different lifestyle  and don’t all fit into the categories drawn out from the lenders.

A general rule of thumb for lenders is a long term steady job, with a salary good salary to loan ratio so for instance they will lend 3 times what you currently earn a year, very clean credit and the bigger the deposit the better.

A mortgage adviser will able to determine how much you will be able to borrow.

So What If I Don’t Fit The Criteria?

There are  two main types of 'Non-standard borrowers and these usually come under  -

1. Directors with large holdings and the self- employed.

2. People with an adverse credit history and recorded, CCJ’s, bankruptcy, arrears.

If you fall into one of these categories, you may find it difficult to convince a lender to give you a mortgage especially in the current climate.

But all is not lost there are still options.

Housing Affordability

Affordability of housing varies but here’s a list of the main things you will need to consider when buying your property.

mortgage repayments

  • mortgage protection insurance for if you fall ill or lose your job
  • life assurance to enable your family to pay off the mortgage if you die
  • contents insurance against the risk of theft, fire, flood or other accidents
  • council tax and water charges
  • gas, electricity, telephone, etc
  • ground rent and service charges may apply

Mortgage Calculator Affordability

Using a mortgage calculator will help you determine whether you really can afford to service a mortgage right now and how much lenders will lend you based on your specific circumstances.

Get Mortgage advice here