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Affording a Mortgage
Before even looking for property find how much can be borrowed.
Lenders calculate, as a general rule, 3.5 times income for a single applicant or 2.5 times joint incomes for a couple. Recently lenders have started to offer 4 or even 5 times income giving people a chance to buy a property. Earnings such as commission or overtime may be taken into account depending on how regularly payments are made.
Repossessions are at an all time low and generally people have more money making it easier to pay mortgage payments so lenders are more willing to increase amounts loaned
50% of lenders now lend on ability to pay rather than income multiples and now look at individual cases and most will be offered slightly higher amounts but others may be offered lower such as single parents.
Affordability will be assessed differently by each lender but all will want proof of income, number of children and/or dependant relatives, monthly commitments and household bills.
Interest rates will affect payments and if these should rise sharply can stretch borrowers finances.
• Lenders will check on rental records for proof of+ and reliability of payments.
• Never borrow more than can be realistically afforded
• Choose type of mortgage carefully
• Remember rates change and monthly repayments rise and for those with fixed rates these will rise when deal comes to an end.
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