Sourcing the Best Mortgage

Multi-task mortgage packages

Some lenders will offer borrowers a mortgage at over three and a half times their income to enable them to buy a house. This is fine in some cases - for example a high earning professional with no dependants or large outgoings would be able to afford to put more of their income towards a mortgage each month. If lenders use "affordability" as a method of calculating how much they will lend, instead of income multiples, they can sometimes reach a figure that is four or five times the borrower"s income. These affordability calculations are a more accurate and safe method of judging what the borrower can afford to repay.

Some building societies have redesigned their mortgage criteria to allow certain clients to borrow four times their income. This move allows a client with a clean credit history to buy a house in the area he wants to live. Affordability is now very good in the UK and generally, four times a client"s income will only be lent to those who genuinely need it and can afford to repay it.

Take your time
But just because a lender is willing to offer you a certain amount doesn"t necessarily mean it"s a good idea to take it. The housing market has seen escalating prices for some years now and some experts predict the bubble could burst. Talk your financial status over with several building societies and with a financial advisor if you have one. Buying a property is probably the biggest single purchase you will ever have to make in your life, so it"s worth a little effort to check out every angle. You want that dream house, but what you don"t want is a nightmare financial situation, which could be a strain on your resources for the next 25 years.

There have been far too many repossessions over the last decade for anyone to be too cavalier about borrowing too much money. As ever, the advice is to look carefully at your long term earning prospects and those of your partner, if you have one. Also to take into account how much your children are going to cost you over the next 20 years or so. Then you can go ahead and talk mortgages with the experts Ð and good luck with that home you have always wanted. It could be within your sights this year!