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  4. Mortgages - How Much Money Can you Take Out as a Mortgage

Mortgages - How Much Money Can you Take Out as a Mortgage.

The amount that you will be able to borrow will depend on a variety of factors; income and status, equity, personal details, the property, liabilities, credit history, however the main one that is used is your gross income level.

Most lenders will offer between 2 to 3.5 times your basic salary. If you are taking out a mortgage as a couple the norm is for the amount o be either 2.5 times the joint salary or 3 times the higher salary plus the lower salary.

You will have to show evidence of your salary so make sure that you have pay slips that date back about three months. If you are self employed you will be required to show a letter from your accountant and possibly have to show audited figures of three years.

In general banks and building societies are only likely to lend up to 90% of the value of the property. In order to pay the remaining money many people use savings or security. There are 100% mortgages available but the interest rates on these will be very high.

Many lenders now also use an affordability rating to assess how much money they will lend you. This means that they do not just take into account your gross income but also consider your monthly expenditure to see how much you will have available to repay at the end of the month. This is something that really you should always consider yourself first to make sure that you do not get into the position where you are living beyond your means

Tips :

  • "Never borrow more than you need.
  • Commission and overtime are not usually considered as 'gross income' by the lender.
  • Your relationship and history with a potential lender can make a difference."

(www.themovechannel.com)