A Few Frequently Asked Mortgage Questions

How Much Can I Borrow?

A tricky question! This depends on whether you are arranging the mortgage on your own or with a partner. Usually, if you are buying on your own you will be able to borrow around 4 times your wage or if you are borrowing with a partner, then 3 times your joint income. But, this can vary by lender and depending on your other current outgoings and debts.

Where Are The Cheapest Mortgages?

Another popular and almost impossible to answer question! Just because a lender advertises an impossibly good mortgage rate does not mean that it is open to all. There will probably be restrictions such as you might need to place at least a 25% deposit and have an impeccable credit history. Break either of these terms and you might find that the offered rate is a lot higher.

The only way to find the best rate is to know which lenders are most likely to be willing to work with you for your circumstances and which of these are offering the best rate.

Should I Have A Repayment Or An Interest Only Mortgage?

The idea of the interest only mortgage product is that you have an investment that raises enough cash at the end of the mortgage term to pay off the mortgage. But recently lenders are seeing more borrowers struggling to pay off their interest only mortgages at the end of the term and many are therefore not accepting any more new interest only applications. Therefore, you might not have a choice in the situation, but it looks as though the lenders would recommend the repayment option.

Do I Need A Deposit?

It used to be that the answer to this was ‘No’, but then the world wide credit crunch struck home. Lenders will no longer give you 125% of your home’s value on your mortgage, so you do need a deposit. Most lenders will also offer the best rates for those borrowers able to put down the biggest deposits. If you are able to place a deposit of 25% or more of the property’s value, then you will probably be one of the lender’s favourite customers and be offers a rate to match.

My Credit Is Not Exactly Whiter Than White – Can I Get A Mortgage?

It depends just how bad your credit report is. If it is very bad then maybe not, but there are a few lenders that specialise in lending to customers with credit problems. There may be a few extra criteria to consider, such as a bigger deposit than normal and it is likely that the interest rate charged will be higher than normal. But having a bad credit history does not always mean that you will not be eligible for a mortgage.

Hopefully, this will answer a lot of your questions. If you have any more that you would like me to try to answer, just leave a comment!