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- How long are mortgages usually for?
- As with any loan, you can choose to take your mortgage out for any amount of time – however the norm is 25 years.
- How Much Is The Valuation Fee?
- The Valuation fee covers the expense of the mortgage lender visiting your prospective property to ensure that it is worth what you are intending to pay.
- Will I Have To Pay An Arrangement Fee And How Much Will It Be?
- The Arrangement Fee is also known as an Administration or Application fee and it’s designed to cover your lender's administrative costs for setting up the mortgage.
- Low Setup Cost Mortgages
- When you apply for a mortgage and to buy a property, there are certain initial costs that are, on the whole, unavoidable.
- Equity Release
- Equity Release is a means of using the value of your home to receive either a lump sum of cash or regular monthly instalments.
How Much Can I Afford?
You have to be very careful when buying a house to be sure that you will be able to afford the monthly mortgage repayments – as you risk losing your home completely if you find you simply cannot afford it.
If you are moving into a house on your own then you will generally be able to get a mortgage for 3 times your salary. You will also need to provide a deposit of at least 5% of the total house price. So if your annual salary is £30,000 you will be able to afford a property worth £95,000 – leaving a £5,000 deposit.
If you are moving into a house as a couple or with a friend – the rules are slightly different. You will be offered either three times the annual income of the higher earner plus the total second income, or two-and-a-half times the total joint income.
Many lenders offer variations on the above rules. Some banks offer graduate mortgages and will allow you to borrow 4 or 5 times your salary. If you have a good credit history you may be able to get more than 3 times your salary from many lenders – however you have to consider what you can afford to pay back on a monthly basis, and it’s simply not worth borrowing more than you can afford if it is going to financially cripple you to meet the repayments.
You may also be able to get a mortgage where you do not need to give a deposit, these are known as 100% mortgages.
Another good way to work out what you can afford is to use a mortgage calculator – inputting all the details of your monthly outgoings i.e. bills, car, entertainment and food. This will give you a good idea of whether you will be able to manage your monthly mortgage repayments.
- How Is Interest Calculated On a Mortgage?
- Where can i buy a mortgage ?
- Can I Get a Mortgage With A Group Of Friends?
- How Much Is The Valuation Fee?
- Will I Have To Pay An Arrangement Fee And How Much Will It Be?
- What Exactly is a Mortgage?
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