Before you start looking for your first, or next, property, it is important to understand what you can afford to buy, and what the lenders will allow you to borrow. This can impact the size of home you can buy, the location and what is attainable for you as a solo buyer or with a partner. Mortgage lenders won’t lend you more than they deem to be a sustainable amount to repay, so before you start looking it’s important to find out – what level of mortgage can I afford?
Unless you can afford to buy a property outright, your property purchase will most likely be made up of a deposit, which you provide, and a mortgage - meaning you need to borrow money from a mortgage provider.
There are mortgage calculators online that many use as a guideline, but these simple tools don’t take into account other factors which may impact the lending amount, including any other financial commitments, dependants and lifestyle. A mortgage expert can help you gain an accurate understanding of how much you can borrow, which ultimately can save a lot of time and heartache of falling in love with a house that you can’t afford.
There are certain questions which you will be asked when applying for a mortgage. Importantly, will you be a solo purchaser, or purchasing with a partner. You will then be asked to provide your income and the income of the person you are buying with.
As a rough guideline, lenders will offer you between three and four-and-a-half times your solo income or the combined income of the buyers.
This may seem simple, however this isn’t a true reflection of what you will be offered. Lenders will ask you in depth questions about your spending habits as part of an affordability assessment, including inspecting official bank statements and payslips. Details taken into consideration could include food, leisure, transport and shopping.
Other questions may include your current and previous financial commitments and debts including student loans and credit card bills. These figures could be subtracted from the initial amount which may be supplied to you by the standard ‘mortgage calculator’ lending suggestion.
There are certain financial adjustments you could make in preparation of your mortgage application, including ensuring your outgoing costs are as low as possible in the leadup. You could review and reduce your bills, switching to cheaper tariffs and packages and cancelling any subscriptions that aren’t necessary. Other changes could involve cutting down on needless spending by giving up the morning coffee on the commute to work, preparing your own lunch instead of buying it everyday or taking cheaper transport alternatives.
The advice which a dedicated mortgage adviser provides could prove to be worth thousands of pounds over the term of a person’s agreement. Failure to gain the right advice and as a result choosing the wrong deal could ultimately damage the possibility of moving up the property ladder or the amount of equity which those have within their property.
The Bradley Hall Mortgages team not only unlocks the best deal for the consumer, we manage the application stage on behalf of the client, taking them through it step-by-step to ensure the process is as stress-free as possible. We take all personal information including credit history, deposit size, preferred monthly repayments and pair you with a bespoke solution.
For more information call 0191 260 2000 or email mortgages@bradelyhall.co.uk
