11th December 2012

The popular belief is that unless you have a massive deposit you will struggle to get a mortgage. However, according to the financial information service Moneyfacts, there are now many more mortgages requiring a deposit of at least 5% of the property value, compared with just 24 last year. Meanwhile the number of 90% mortgages has increased in the past year.  These products are often cheaper than they were several years ago, and work out similar to average rental payment.

Many lenders now work on affordability models, which means they will look at all your income, outgoings, age, number of dependents and other factors. Obtaining a mortgage is much more difficult than it used to be before the onset of the banking crisis. Therefore the amount you can borrow depends largely on your individual circumstances.    In some instances you can borrow a maximum of five times your single or joint income, but if you have a family or large outgoings, this could be considerably less. The standard amount tends to be about four times your income.  A simple monthly budget planner detailing all your monthly spending now, and what you expect to pay when a property owner is a useful tool.  Work out what you really are prepared to “sacrifice” in order to own your own home so there are no surprises, and stick to the budget you are comfortable with.


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