About Income
Most people want to know how much they can borrow and their income is a key driver for this.
This varies from lender to lender although as a rough guide 4 x income is usually an acceptable guide. If a household has joint income of £25k then £100k should be available.
Monthly outgoings for things such as loans and credit cards will usually be deducted from the income to compensate for this additional financial burden.
Some lenders have also introduced affordability criteria, where expenditure and income were taken into account and the “spare” would dictate how much mortgage could be afforded.
Since the credit crunch the criteria has tightened considerably and lenders usually look for a combination of income and affordability, plus evidence of income.
Up until recently some lenders would also allow borrowers to “Self Cert” their income - to promise the lender that they were earning the amount stated on the application without any evidence.
Self certification mortgages are no longer available
This does not mean that the self employed or company directors with low PAYE earnings cannot obtain a mortgage. It means that evidence will be required in these cases. Income from all sources is generally acceptable, including dividends.
In these cases, lenders will generally ask for up to three years of accounts from your company or companies.
Beware of web sites that promote finding you a mortgage deal as they can result in a vast number of mortgage applications being ‘agreed in principle’ and that can adversely affect your credit status!
Remember that multiple mortgage applications can look bad on your credit history.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There will be a fee for mortgage advice. The precise amount will depend
upon your circumstances, but we estimate that it will be £500.
DTE Risk & Financial Management Limited is Authorised and regulated by the Financial Services Authority
Registered office: DTE House, Hollins Mount, Bury BL9 8AT Company number 01967512 (England)