Mortgage Affordability

In short, affordability checks are calculations designed to make sure that you are in a position to afford your requested mortgage amount both now and in the future. Each lender has their own way of assessing affordability.

As a rule of thumb, lenders may lend you up to around 4.5x your annual salary. However, existing financial commitments and other circumstances will impact and reduce that figure;

Loans/ Credit Cards

You will improve your affordability if you can pay off any outstanding loans/ credit cards prior to your mortgage application. If this isn't an option, try to avoid taking out any further loans and make sure you keep up with existing payments.

Employment

We would advise to not change jobs in the six months leading up to your mortgage application. You want to be able to evidence secure employment with a regular, stable income - a new job with a probation period could jeopardise this. Similarly, if you're self-employed don't make changes to your company status as any income proof under the old status may not be accepted.

Mortgage Affordability

In short, affordability checks are calculations designed to make sure that you are in a position to afford your requested mortgage amount both now and in the future. Each lender has their own way of assessing affordability.

As a rule of thumb, lenders may lend you up to around 4.5x your annual salary. However, existing financial commitments and other circumstances will impact and reduce that figure;

Loans/ Credit Cards

You will improve your affordability if you can pay off any outstanding loans/ credit cards prior to your mortgage application. If this isn't an option, try to avoid taking out any further loans and make sure you keep up with existing payments.

Employment

We would advise to not change jobs in the six months leading up to your mortgage application. You want to be able to evidence secure employment with a regular, stable income - a new job with a probation period could jeopardise this. Similarly, if you're self-employed don't make changes to your company status as any income proof under the old status may not be accepted.

Your affordability and what you need to do.

In the lead up to a mortgage application, it is imperative that you start actively managing your money.

Know your budget.

A very simple but important exercise; go through your bank statements and make a note of your guaranteed income and expenditure each month.

Track your expenditure.

And we mean everything; dining out, food shops, travel costs...meal deals! Do this for a few months and you should start to see a pattern and potentially see where easy cut backs could be made to improve your affordability. Most importantly, you'll get a good idea of how much you could comfortably afford as a monthly mortgage payment.

Income proof.

Start thinking about how you'll be able to prove your income to lenders. You won't get very far with a mortgage application if you're unable to provide evidence of a reliable and steady income.

Your affordability and what you need to do.

In the lead up to a mortgage application, it is imperative that you start actively managing your money.

Know your budget.

A very simple but important exercise; go through your bank statements and make a note of your guaranteed income and expenditure each month.

Track your expenditure.

And we mean everything; dining out, food shops, travel costs...meal deals! Do this for a few months and you should start to see a pattern and potentially see where easy cut backs could be made to improve your affordability. Most importantly, you'll get a good idea of how much you could comfortably afford as a monthly mortgage payment.

Income proof.

Start thinking about how you'll be able to prove your income to lenders. You won't get very far with a mortgage application if you're unable to provide evidence of a reliable and steady income.

Ready to speak with an adviser?

Give us a call today or drop us a quick message here and we'll be more than happy to help.

01843 228800