How much can I borrow for a Mortgage?
‘How much can I borrow?’ is the most common question asked by people looking to raise a mortgage.
The answer is not simple, it involves multiple personal factors on income and expenditure as well as varying lender criteria. In April 2014 the F.C.A released new regulation called the Mortgage Market Review (MMR). This regulation tightened up affordability checks and put more responsibility on mortgage lenders to ensure borrowers could afford the mortgages they were taking out. Since MMR lenders hide behind affordability calculators which ask a range of questions relevant to their criteria and then produce a maximum mortgage amount.
Your brokers job is to find out all they can about your income and expenditure and research the market to find a mortgage suitable for your needs. We have a handy affordability calculator on this site (click here) which will give you a very rough idea of what could be a reasonable expectation but please ask your broker for a more accurate figure as this is just to be used as a ball park guide.
Every lender has their own criteria when it comes to what they will and will not accept for income. Some lenders will look at and take 100% of your bonuses, overtime and commissions into consideration while others may only take 50%. It is also common for lenders to have varying opinions on your expenditure, some will take pension payments and child care costs into their calculations while others will ignore them and have built it into their calculations already.
Due to the complex nature of affordability we would always recommend taking Independent Advice on your situation.