The amount a mortgage provider is prepared to lend can vary greatly. Although, a good mortgage lender should consider your income and expenditure carefully, and then only commit once it's been deemed that payments can be met throughout the term of the mortgage.
Traditionally lenders will offer
mortgages at the equivalent of three and a half times your annual earnings, but you may get up to four times your earnings if you find the right broker.
If you buy as a couple, then many lenders will offer two and a half times the total of your combined salary.
There is a great deal of competition between lenders to get your business, with many now employing sophisticated credit rating methods that examine your incoming and outgoings expenses.
The idea of these methods is to tailor
mortgages to fit more precisely to a person's situation. For example, someone with high outgoings and a family to support can't afford to borrow as much as someone who is single and earning the same salary.
With a more detailed financial overview, lenders of
mortgages are now able to increase the amount they can lend. Depending on financial circumstance, some borrowers are lent five times their income.
Each lender will have their own methods when calculating how much they are prepared to lend. Some of the things they take account of include:
• Living expenses and household bills
• Total income
• Existing credit commitments such as loans and credit cards
For an accurate estimate of the amount you can borrow, the best thing you can do is contact an independent mortgage advisor.
