Mortgages

How Much Can I Borrow?

Adverse mortgages There are some hard and fast rules to borrowing funds and some leeway too. Many people employ a Financial Advisor who will calculate for you the amount you are likely to borrow given your current circumstances and whether you are likely to need an Adverse Credit product or a Self Employed mortgage. The amount of deposit you put down will be directly influenced by the type of mortgage you go for.

As a general rule of thumb if you are a single applicant you will be offered around three to three-and-a-half times your annual income. If the application is for a joint mortgage then the amount you will be able to borrow is around three times the first income plus the second income or two-and-a-half times your joint income.

Home loans The other factor is the LTV or loan to value rate. This is the percentage of the value of the property a mortgage provider is prepared to lend you.

Most providers will not lend above 95 per cent of their valuation of the property. Most lenders prefer you to have at least a 5 per cent deposit. If you do take out a 100 per cent mortgage the interest rate will be higher.

If you are self employed then you will probably be restricted to three-and-a-quarter times your income.

 

If the application is for a joint mortgage then the amount will be two-and-three-quarter times your combined income. The LTV may be lower too. Most lenders will offer 75 per cent.

There are also mortgages that exceed 100% and these are offered to applicants who may have other borrowings and need the extra to offset against other debts.

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