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FAQ regarding mortgages.
homer_j_3
Posts: 3,266 Forumite
Hi
I thought that I would try and create a thread where a lot of the more common questions that we all see can be put and added. I am going to ask Martin if this can be a sticky as I believe that if people read this, a lot of their questions will be answered.
If I have missed any, please feel free to add:
Q. How much can we borrow?
A. As a sole applicant you can normally borrow upto 5x your gross annual salary. As a joint application this will normally reduce to somewhere to 3-4x your joint income. There are always exceptions to these rules where more may be lent in circumstances of demonstration of good financial management and with plenty of equity.
Q. What effects do my debts have on my borrowing ability?
A. Any debts held by any of the applcants, this will reduce the amount of borrowing. It is normal for lenders to annualise the credit and deduct this from the applicants gross income. E.G. A £100p/m will result in £1200 deduction of the applicants income.
Q. Who is currently offering the best deals at the moment?
A. You need to understand that mortgages are not a "one size fits all" product and what can often be good for one person may be seriously wrong for the next. You need to find the best deal for YOUR specific requirements.
Q. Fixed or Tracker?
A. Once again, it is very much down to each individuals preferences to which one you should go for. Each kind of product will have its pro's and con's. The key is to understand these and work out which one is right for you.
Q. Who has the best fixed/discount/tracker rates at the moment?
A. Lenders will change their rates quite regularly and because of this one lender may have the best rate one day but not the next. You also have to consider the fact that not all lenders may be suitable for you so it may not be the lender offering the best rate which is best for you personally. You can check comparison tables such as the one on the FSA website.
Q.How much will it cost me?
A. As rates available differ and will often depend on your credit rating/history. There are plenty of mortgage payment calculaters available online and by looking at some of the high street lenders for current rates, you can work some scenarios out from here. If your credit is not as perfect as you would like, I would seek advice for appropriate rates at that point in time.
Hopefully this will cover some of the main repeated questions but I am sure there are more. So if you feel I have missed any, please feel free to add.
If you do not feel comfortable in researching and choosing the right mortgagr for you, seek professional advice and my comments on here are for general guidance only - as my signature clearly states.
I thought that I would try and create a thread where a lot of the more common questions that we all see can be put and added. I am going to ask Martin if this can be a sticky as I believe that if people read this, a lot of their questions will be answered.
If I have missed any, please feel free to add:
Q. How much can we borrow?
A. As a sole applicant you can normally borrow upto 5x your gross annual salary. As a joint application this will normally reduce to somewhere to 3-4x your joint income. There are always exceptions to these rules where more may be lent in circumstances of demonstration of good financial management and with plenty of equity.
Q. What effects do my debts have on my borrowing ability?
A. Any debts held by any of the applcants, this will reduce the amount of borrowing. It is normal for lenders to annualise the credit and deduct this from the applicants gross income. E.G. A £100p/m will result in £1200 deduction of the applicants income.
Q. Who is currently offering the best deals at the moment?
A. You need to understand that mortgages are not a "one size fits all" product and what can often be good for one person may be seriously wrong for the next. You need to find the best deal for YOUR specific requirements.
Q. Fixed or Tracker?
A. Once again, it is very much down to each individuals preferences to which one you should go for. Each kind of product will have its pro's and con's. The key is to understand these and work out which one is right for you.
Q. Who has the best fixed/discount/tracker rates at the moment?
A. Lenders will change their rates quite regularly and because of this one lender may have the best rate one day but not the next. You also have to consider the fact that not all lenders may be suitable for you so it may not be the lender offering the best rate which is best for you personally. You can check comparison tables such as the one on the FSA website.
Q.How much will it cost me?
A. As rates available differ and will often depend on your credit rating/history. There are plenty of mortgage payment calculaters available online and by looking at some of the high street lenders for current rates, you can work some scenarios out from here. If your credit is not as perfect as you would like, I would seek advice for appropriate rates at that point in time.
Hopefully this will cover some of the main repeated questions but I am sure there are more. So if you feel I have missed any, please feel free to add.
If you do not feel comfortable in researching and choosing the right mortgagr for you, seek professional advice and my comments on here are for general guidance only - as my signature clearly states.
I am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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