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How Much Can I Borrow For A Mortgage?

I am applying for a mortgage at the moment.

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    This depends on how much you earn and how much the property you want to buy is worth.
    Depending on the property's value
    Most lenders will loan up to 75% of the property's value and many will go to 90% or 95%. Some will even let you have up to 100% - but you'll pay over the odds for this and will probably be forced to buy mortgage indemnity insurance. A few will even lend more than that but special rules will apply.
    Depending on how much you earn
    The amount you can borrow will vary between lenders but the rule of thumb is three and a half times your annual earnings. However typical variations would include:
    Couple 1: two and a half times both annual incomes
    Couple 2; three to three and a half times the greater income plus one year of the second income.
    Some lenders now use more sophisticated credit rating methods, where they examine your income and your outgoings. The idea is that every borrower has unique circumstances.

    Someone with teenage children and high outgoings can't afford to borrow as much as a singleton earning the same salary.
    Sometimes people are lent five times their income.
    Assuming you have a regular income and clean credit history you are likely to be offered a loan fairly easily.
    Despite the impression you may be given that you've got to jump through the hoops, the competition between lenders is fierce and they want your business. To secure the loan though you'll still be best off playing the game by acting duly grateful though.
    Perhaps the more important question is more how much can you afford. Some lenders will want to estimate this by checking your average outgoings e.g. your household bills, any debts etc. Some will get you to fill in a detailed questionnaire either by hand or on the phone or online etc.
    If you're a first time buyer it will always help if you can show you've been paying regular rent for a similar amount to what your intended mortgage payments will be.
    Depending on the area you want to buy in, sometimes lenders' may refuse a loan if they feel the property isn't expensive enough for the area. This is more likely to be the opposite - where a property is seen as too expensive.
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    Shujing 

    answered 3 years ago

      Income is 86,000 and the loan is 260,000.
      0 0
      Guest

      Guest 

      answered 3 months ago

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