First Time Buyer

How much can I afford?

Mortgages are now assessed on affordability criteria rather than the old-style income multiples.

This involves a lender looking at your income and all of your essential outgoings and deciding whether you can afford repayments. As of the 26th April 2014 lenders are expected to stress test whether you are able to afford the mortgage if interest rates rise in the future. Don’t be surprised if you are quizzed about very detailed outgoings like your gym membership and monthly food bill. You will also be expected to prove this. Different lenders use different methods and the amount you can borrow will depend on a lender’s affordability criteria, but for someone with fairly standard essential outgoings it will typically be in the region of around four times your annual income.

You also need to take responsibility for not overstretching yourself - don't take on a bigger mortgage than you can afford. Your mortgage professional can help you with this.

Buy To Let Affordability?

After the 2015 budget announcement regarding the taxation of investment income and in particular buy to let rental income, most of the lenders have changed the way they calculate rental yield and affordability. This is an area that you really need to take advice from your mortgage professional and trusted accountant.

FAQ

What size deposit do I need?

What is Higher Lending Charge or Mortgage Indemnity Guarantee?

Do I need Insurance?

 

A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.