How Much Can I Borrow?

As of April 2014 there was a change in the mortgage market, lenders are now responsible for how much you can borrow so it is harder to get mortgages. Your mortgage amount will be based on what the lender calculates you can borrow.

How do Lenders assess income?

This is a minefield as Lenders assess income in different ways as outlined below.

Employed

Usually based on your current (or imminent) income and evidenced by; bank statements, payslips and P60s. Some lenders take into consideration all overtime and bonus, some lenders take a portion of overtime and bonus and some take NONE of these! If you receive a Bonus, lenders have different views on this whether paid annually, quarterly or monthly. Some lenders take deductions from wages for pension and other items but others do not Some lenders accept people with job offer letter and start date, others you must have been there for a minimum 1yr Sounds simple and easy?

Self Employed & Business Owners

Lenders assess the income of self employed and business owners in different ways as well including;

• Salary + Net dividend
• Salary + Gross dividend
• Salary + Share of net profit before tax
• Salary + Share of net profit after tax

The above could be judged on average 2yrs or 3yrs figures, or 1yr accounts plus an accountant’s projection

The Upshot

There is a massive variation in how much different lenders will lend to you. In our experience, the difference, as to the maximum they will lend to you, can vary significantly between lenders, for the same person with the same income details. We know which lenders to approach to get the best deal and appropriate amount of mortgage lending for our clients. Would you like to become a Castle & Grey Client? Click here to contact us

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A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.