   
Ronan Marrion
Posts: 7
Joined: 10/8/2010
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Borrowing capacity query!
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Below is a question I was asked a few days ago by someone enquiring about a new mortgage. Please see my response follows.
How much can you borrow these days for a mortgage? I know it used to be around 3.5 times your joint income, but is there any way to know the maximum I could potentially borrow if I wanted to? I am looking for a pretty large mortgage but the normal affordability doesn’t suit me at all as my earnings come in a few different formats.
Many lenders nowadays will use an 'affordability calculator' to work out how much you can borrow. This will take account of all of your circumstances and could potentially allow you to borrow anywhere from two to six times your income - what a variance!
The elements of your personal circumstances they will assess within their 'affordability calculation' are things such as:
- Your age and the term in years of mortgage you wish to have
- Existing credit commitments and the monthly payments on these
- Your income and its exact breakdown i.e. if salaried what is basic income, what is overtime, commission etc?
- Any deductions from pay you have i.e. pension contributions, student loan payments etc!
- The number of individuals attributed to the mortgage eg a single man will have a greater affordability than a man who is married with 3 children.
- Your credit score
If you are looking to get an exact figure I recommend you speak with an independent mortgage broker who will be able to give you a definitive borrowing figure. They will know which lender is most likely to be flexible for your particular mortgage situation especially if it is a large mortgage.
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