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Mortgage
Guide
Follow
our step-by-step guide through the intricacies of buying a home:
-
how much you can borrow and from whom
- what
kind of loan would suit you
- conveyancing
and legal terminology
- the
costs
- and
where to get advice.
You
have to narrow down your options before coming to your decisions.
The
checklist above should be your starting point
The first step
in the homebuying process is to approach a lender. This is to find
out how much you can borrow and possibly to obtain a 'decision in
principle' certificate as well. These are issued by some lenders
and state, subject to a property valuation and your financial status,
that you are able to get a mortgage up to a given sum.
The mortgage adviser employed by your lender will be able to tell
you the amount it is prepared to lend you, taking into consideration
your income and, if relevant, your partner's income. Although lenders
differ slightly in the amount they will lend, it is usually around
three times your gross annual earnings. If it is to be a joint loan
for two or more people, the lender may be prepared to lend you three
times the annual income of the highest earner, plus once the other
income(s), or two-and-a-half times the joint income. Other earnings,
such as commission or overtime, may be taken into consideration
by the lender, but it depends on how regularly you earn this.
At a later stage in the mortgage application process, the lender
may get in touch with your employer to confirm your salary. It will
also want to make sure you have paid regularly into your existing
mortgage or made regular rent payments. In the case of self-employed
people, at least two and probably three years' audited accounts
of the business will be needed.
Most lenders offer mortgages of up to 90 or 95 per cent of the value
of the property or price you are paying for it - whichever figure
is lower. A few offer 100 per cent mortgages, but loans with a very
small or no deposit very often incur a charge to cover the lender
for taking the extra risk.
 Click
Here to use our mortgage calculator
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