The Affordability Question
A simple question in theory but one that is more complicated than it sounds ‘how much can I borrow’ is often asked.
Whether you are buying your first home, moving home or looking to remortgage this is a critical question. Is the dream home within reach or can I afford those home improvements?
Back in the old days lenders would lend you 3 times your salary or 3.5 times your salary and if you were lucky then they would add your partners salary into the equation. Nowadays it is more like 4.5 times salaries and sometimes more depending on other factors like the amount of your deposit or the equity from your sale and also the level of your salary. That said there are many other factors taken into account which is where it gets complicated.
Variable income such as overtime, bonuses, shift allowances, commission really vary how much you can borrow. On a repayment mortgage the overall term dictates the monthly payment, which has an impact. Credit commitments, how much you are paying for your car, credit cards, personal loans, other hire purchase and even mobile phone payments can impact. Private School fees, maintenance, spousal support, background Buy to Lets all have an impact. There are many reasons why modern affordability calculations are more complex than they were in the past.
Getting an easy answer is hard so Haus Advisory have launched our own Affordability Calculator. You simply enter a few details on our website and then we use the latest API technology to return live results directly from lenders to give you your maximum mortgage amount.
We are excited about this as it helps to make the process of securing your mortgage a bit easier and helps save you time in understanding your options. Go have a go!
