Can We Get A Mortgage ?
The fundamental principles of approval are as follows:
- Secure income
- Proven evidence that you can afford repayments even if rates rise by 2%.
- Adequate deposit
- Good credit history and well managed finances
What is the maximum mortgage limit.
- New rules place a limit of 3.5 times your normal gross income as your maximum mortgage.
- Exemptions are available and having access to a wide range of lenders means that your chances of getting an exemption are improved by dealing through us. However in many instances a multiple of 3.5 time’s gross income is a fair multiplier when it comes to affordability.
The following is a breakdown of what you need to get a mortgage.
1. Employment - Is your income secure
- You need to be in secure employment. Being on a permanent contract is a requirement with most lenders but we are pleased to advise that some lenders will consider contractors where there is evidence of contractual work for over one year on a continuous basis and prospects for further continuous contract work into the future are strong. If the application is dependent on two incomes, then both employments must be satisfactory
- Lenders take a prudent approach .Employees should be employed for at least twelve months and have completed your probationary period.
- The sector in which you work should have long term prospects as should the organisation for which you work.
- The more skills and qualifications you have and that are relevant in today's world - the better.
2. The Deposit
- First Time Buyers- You must have 10% of the price plus your costs – this will be around 3% of the price.
- Second time Buyers 20% of the purchase price.
- Lenders really want to see that you have saved this money regularly over an average period of about two years. Some lenders will allow you to take a gift from a parent, for example, to cover the deposit; however, in this case, you would need to have been paying rent for a considerable period or paying back a loan, as this shows the lender that you can make the mortgage repayments.
3. Can you afford the repayments?
- The most important matter to consider is your comfort level with the proposed repayments.
- Rates will change during the mortgage term. The price you want to pay for a house should be driven by your feeling for affordability.
- As your advisers we need to clearly demonstrate in our lender recommendations that you can afford your mortgage payments even if rates increase by 2%
- The longer the period over which you can demonstrate ability to repay - the better, but it should be a minimum six months and preferably longer.
4. Can you demonstrate good financial management?
- Good regular savings record.
- Minimum of personal debt and credit cards cleared monthly.
- Prudent spending habits.
- If you have taken out loans in the past - there should be no missed payments
- No on line gambling.
- Try and keep it simple- not too many bank accounts - savings simple to follow.
5. A Good Credit Rating
If you have had loans in the past they may show up on a credit check which each lender will undertake. This check will show whether these loans where repaid within the terms of your agreement. If this check shows a missed payment within the last two years it is likely your mortgage application will be declined. Another way of establishing a good credit rating is through your bank accounts. Your current account should show a core positive balance each month. This will demonstrate that you have sufficient income left over to pay your mortgage. As mentioned previously regular monthly savings or loan repayments will help create a good credit rating. If you are thinking about buying a home in the near future you can now put a plan in place to ensure you qualify by following the points in section 1, 2 & 3 above.
Moving Home
Whatever your reasons for moving home, make it a smooth transition. At Anchor Life & Pensions Ltd, we aim to satisfy our customers and to meet their expectations at every stage. Give us a call – or stop by our office – to discuss your options and find out exactly what suits your lifestyle. We have up-to-date skills and experience to provide you with precise information to set you on your way to securing your new property. If you are about to make your next step on the property ladder then it is important you get the right advice. As a home owner you have been through the mortgage application process before and will know how important it is to get the right mortgage. You might plan to sell your existing home or perhaps you may want to keep it and rent it out.
Pick up your phone and call us today.
Buy to Let
Buying an investment property is an investment in your own future. The rent you receive can help pay the mortgage and provide you with an income in retirement. When buying an investment property you need to make sure that it is in a good location where it can easily be rented out. Your Mortgage Advisor can offer advice and guidance to all property investors to make sure you get the mortgage that’s right for you. Whether you are a novice investor buying your first investment property or more experienced with a portfolio of properties, we can offer sound advice.
