One of the most frequent questions to start a mortgage interview tends to be around \u2018How much can I borrow?\u2019.\u00a0\u00a0 Only a few years ago, that could easily have been up to 8 x income with the minimal of fuss.\u00a0 Oh, how things have changed, and rightly so!\u00a0 Those were times with little control and the lengthy recession bore testament!<\/p>\n
Today it is so much more intense!\u00a0 For example, a lender will require to know your monthly budget spend figures, right down to every direct debit on your bank statements, including council tax, insurances, mobile phones, lottery payments and gym membership!\u00a0 From these monthly outgoings, the lender will look at affordability and decide from there what mortgage amount might be available to you.\u00a0 However, on the other side, not only can it be restrictive depending on your monthly outgoings, but it can also be very generous depending on what little outgoings you have!\u00a0\u00a0 The lender has a duty to make sure you can afford your mortgage today, as well as when rates rise and specifically to it being considered affordable over a 5 year period.<\/p>\n
But this also means that what was once an affordable mortgage may suddenly become unaffordable due to the perception the lender has on consumer spending habits, both historically and projected for the future.<\/p>\n
We have seen the phasing out of income multiples and the introduction of affordability models.\u00a0\u00a0\u00a0So, no more straight forward 4 or 5 x income discussions.\u00a0\u00a0The amount you can borrow will depend on your monthly net income against expenditure and living costs.\u00a0\u00a0However, this also works positively for the right loan to value, right affordability and right customer, as lenders are willing to offer a little bit more.<\/p>\n
With the increase in requirements, the time taken in research prior to recommendation for a suitable mortgage product has also increased, as have the lenders own underwriting procedures.\u00a0 So, beware if you are in a rush!<\/p>\n","protected":false},"excerpt":{"rendered":"
One of the most frequent questions to start a mortgage interview tends to be around \u2018How much can I borrow?\u2019.\u00a0\u00a0 Only a few years ago, that could easily have been up to 8 x income with the minimal of fuss.\u00a0 Oh, how things have changed, and rightly so!\u00a0 Those were times with little control and […]<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"slim_seo":{"title":"What is mortgage affordability? - Impact Specialist Finance","description":"One of the most frequent questions to start a mortgage interview tends to be around \u2018How much can I borrow?\u2019.\u00a0\u00a0 Only a few years ago, that could easily have bee"},"footnotes":""},"categories":[1],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.impactsf.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/8435"}],"collection":[{"href":"https:\/\/www.impactsf.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.impactsf.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.impactsf.co.uk\/index.php\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.impactsf.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=8435"}],"version-history":[{"count":0,"href":"https:\/\/www.impactsf.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/8435\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.impactsf.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=8435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.impactsf.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=8435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.impactsf.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=8435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}