How long does a mortgage last?

How much can you borrow?

Lenders should lend responsibly. This means that they should consider whether you can keep up the mortgage repayments now and throughout the term of the mortgage; for example after an initial discount period ends. They should base this on things like your income, expenditure and other circumstances.

Mortgage lenders have traditionally offered to lend up to three-and-a-half times your salary (before tax).

If you’re buying as a couple they would normally include the smaller earner’s salary, multiplied x 1.

Alternatively, many lenders have offered a couple’s total salary x 2.5.

Higher multiples dependant upon affordability have started to appear over the last few years but care should always be taken to ensure that a mortgage remains affordable.

Lenders may take into account

  • If you have other money coming in, such as bonuses, overtime or commission. However, since it isn’t guaranteed income, lenders may only take into account half of this money.
  • If you already have lots of expenses, such as other loan payments, they will offer you less.

    • Recently it has become more common for lenders to make an affordability assessment when calculating how much they are prepared to lend you. Each lender will have its own method, but generally they will all try to calculate your disposable income, taking account of:

  • your total income;
  • any credit commitment such as loans and credit cards; and
  • household bills and living expenses.

    • Whether you receive advice or not, the lender must still lend responsibly. However, it's always worth satisfying yourself that you can afford the monthly payments - use our Budget calculator to make check your affordability

    Keep borrowing comfortable

  • Work out your budget using our Budget Calculator at the end of this guide to see how much money you’ve got coming in and going out and how much money you’ve got to spare.
  • Don’t overstate your income to get a bigger loan. If you lie about your income, you could end up with a loan you can’t afford and possibly lose your home. You’ll also be committing a fraud and could get a criminal record.

    • In Summary

    Work out your budget first.
  • Don't borrow more than you can afford to repay.
  • Don't be tempted to overstate your income to get a bigger loan - it's fraud.

    • Download PDF Version of this Guide
    Contact Us for a Mortgage Quote

     

    Complete this enquiry form to obtain more information
    Title
    First Name
    Surname
    Post Code
    Email Address
    Telephone Number
    Preferred Contact Time
    Any comments you wish to add?
    These details will be used solely by Hanson Wealth to contact you.
    Mortgage Advice

    We have a community of independent financial advisers based throughout Scotland, England, Wales and Northern Ireland as well as a variety of services available over the telephone or via the internet. So even if you are not based near to one of our branches, we can still ensure that you will get quality independent financial advice from our IFA team.

    Call free today on 0800 881 8085

    9am - 5pm Monday to Friday or leave a message outside of these hours and we will call you back.

    Copyright 2005 © Hanson Wealth Legal Information

    Hanson Wealth Management Limited is an appointed representative of Hanson Financial Partners Ltd, which is authorized and regulated by the Financial Services Authority. Hanson Financial Partners Ltd is entered on the FSA register under reference 529347. The information contained within this site is intended for UK consumers only and is subject to the UK regulatory regime.

    Web Analytics