How many times my salary can I borrow for a mortgage?

As a general rule of thumb, you can borrow between 4.5 and five times your income but lenders generally tend to take away your overall expenditures from your income before they multiply it.

What is loan-to-value or LTV?

Loan to value is displayed as a percentage and is worked out by taking the mortgage loan amount divided by the value of the property and multiplying this answer by 100. LTV% = (Mortgage Loan / Property Value) * 100

How can I get a mortgage?

You can go direct to the lender/bank who will give you specific mortgage advice and rates specific to them or speak to a mortgage broker who can give you advice and rates from majority of mortgage lenders on the market. Your personal circumstance may not be ideal for one lender but acceptable from another. A broker/adviser will place you where you fit criteria.

How can I get a mortgage with bad credit?

Yes you can but it can be more difficult and more expensive than getting a mortgage with good credit. Some lenders will allow a specific amount of defaults and missed payments within a set period. Some will also accept CCJs if they are below a threshold amount and were registered and settled within a set period.

How can I get a mortgage being self-employed?

The overall process is the same a being employed, but you will need to demonstrate your income by providing either 2 or 3 years tax returns or Self- Assessment returns. You would need to provide 2 or 3 years Tax Calculations and Tax Year overviews. Some lenders take your most recent tax figures as your income, other take a average of the last 2 years.

How can I get a mortgage on benefits?

Yes you can and some lender will use benefits such as child benefits as a part of your income which will enable you to borrow more.

How can I get a mortgage on low income?

You can but you will have to be realistic with the type of property you are looking to buy. If a lender will lend approx. 4.5X your salary you will need to look at properties that fit your affordability. Use a mortgage calculator to find out how much you can borrow.

How can I get a mortgage without a job?

If you have no income you will have to apply for the mortgage with someone who has an income. Lenders wont lend money to someone with no possibility of them keeping up with the monthly payments or associated costs. That provides too much of a risk of default.

How can I get a mortgage whilst on maternity leave?

Yes you can but will need to get all the details of your income i.e. what salary you had when you started maternity leave and what changes, if any, will be taking place once your baby is born. E.g will you be going back to work part time, will you be having any change of your role or income. They will then work out your affordability accordingly.

What LTV can I borrow up to?

For a standard residential mortgage some lenders will let you borrow up to 95% LTV. For a Buy To Let you can borrow up to 80% LTV although majority of high street lenders lend up to 75%.

First Time buyers – AllCity Finance

Q: How much can I borrow?

To calculate how much you are likely to be able to borrow, use a mortgage calculator. Whether its for a Buy To Let property or your main residential, use the calculator or speak to a broker/ advisor who will assess your income and expenditure and calculate your affordability.

First Time buyers

First-Time Buyer(s) are those who have never owned a property by themselves or with anyone else. You can only qualify as a First Time Buyer once and there are specific mortgage products tailored to helping you.

AllCity Finance

First Time buyers

As a First time buyer there are 10 Steps you will go through when purchasing your home.

Find out how much you can borrow

Use the mortgage calculators to get an accurate but not definitive mortgage amount you can achieve. The calculators will take into consideration your income and expenditure and give you the amount you can borrow and approximately how much the monthly cost will be.

You can also use the Stamp duty calculator to see how much you are likely to pay in stamp duty.

You will then need to check how much deposit you have and add this amount to the loan amount to see what property value you can afford. The higher the deposit the better rates you will get! If you are aiming to use government schemes like Help to Buy or Help to Buy ISA, LISA, or similar schemes you will need to do additional applications and calculations.

Once you have these figures you can then start looking for a property within your budget.

** you should also download the checklist of what documents you need to get together before putting any offer or application can be put in **

Affordability Calculator

Get an Agreement in principle

Once you get all of your documents together you will need to get an official Agreement in Principle from your chosen lender. It is best to get the agreement in principle before you view properties or at least before you decide to put an offer in.

This is a certificate that will tell you officially how much the lender can lend you (subject to successful application). You will need to provide this along with other documents to the estate agent before your offer on your purchase can be officially registered with the seller.

You can get an agreement in principle by speaking with a mortgage broker or directly to any bank or building society.

Choose your home and make an offer

When looking for your potential purchase, you should contact the estate agent direct and speak to the sales rep firsthand. You are more likely to get a faster response or get access to the most recent properties being put on the market as opposed to emailing via websites or 3rd party seller sites.

At this stage, you will have got your Agreement in principle for the potential loan amount, and (if you followed the checklist of required documents) you would have a copy of your bank statements showing proof of your available deposit.

The two documents are proof that you have the finance in place to pay for the home if your offer is accepted and you are prepared to move things forward quickly! You can now confidently put your offer in on the home via the estate agent.

Apply for a mortgage

No doubt the estate agent and seller will be impressed by how prepared you are and will accept your offer. Ideally! The next step is to apply for the mortgage.

Either through your mortgage broker or direct with the bank or building society you received your Agreement in principle from, you will need to complete a full application and provide them with any further documents. (You will already have these ready if you followed the checklist).

The mortgage advisor/broker will recommend the right mortgage product for your needs.

Find and instruct a solicitor

Most mortgage products for first-time buyers or residential purchases will come with incentives. Either a free solicitor or valuation.

If your product comes with a free solicitor, you will not have found your own, the lender will provide one from their panel of solicitor firms. If the lender’s products don’t come with a free solicitor, you will need to find and instruct one to handle the conveyancing process. Your mortgage broker can recommend one with good prices, efficient systems, and a track record.

The take care of the receiving, transferring of the money from the bank to the seller solicitors, and the transferring of property ownership including paying the stamp duty and registering the property in your name.

Instruct Valuation

Most mortgage products for first-time buyers or residential purchases will come with incentives. Either a free solicitor or valuation.

If it’s free, the lender will instruct a basic valuation on the property to check if it’s suitable security and is worth how much you are buying it for. If it’s not free you will have to pay for this at the application stage.

You can also arrange for a more in-depth home buyers survey that will cost more but will show up any potential issues with the property.

Mortgage offer issued

Once you get to this stage, Congratulations are in order. The lender would have done all the necessary checks on you and your financial profile, they would have also been satisfied with the valuation report issued for your new home.

As a result, they will issue you with a formal offer. This is a contract that which they agree to lend you a set amount of money, at the agreed interest rate on your KFI (Key Facts Illustration) and for the agreed term.

You can breathe freely now as your job and that of the mortgage broker/adviser are done. They will also send this report to your chosen solicitors. Their job starts here.

The Conveyancing Process

The solicitors will carry out the following searches:

1. Local authority searches
2. Land Registry searches
3. Environmental searches
4. Water authority searches
5. Location specific searches
6. Chancel repair search

Searches can take up to three weeks to complete but could take longer depending on the response time of the council or local authorities. If the searches uncover further issues this process could take longer as the solicitors gather what’s needed.

Exchange and complete!

Once all the searches have come back and both seller and buyer’s solicitors are satisfied, your solicitor will request your loan money from your lender. This typically takes 5 days for them to receive it.

They will then require you to send your deposit to them along with the balance of solicitors fees (if applicable). When they have received all funds, they will exchange contracts and send the money to the seller’s solicitor to complete the purchase.

5 main questions when getting a mortgage:

01 How much can I Borrow/Afford?> Best Residential Mortgage calculator

02How much will it cost me per month?> Best Monthly Mortgage payment Calculator

03How much will I pay in Stamp duty? > Best Stamp Duty Calculator

04How much deposit do I need to cover the purchase and other costs?

05What documents do I need to provide to get my Mortgage? > Package your mortgage for efficiency and success

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Affordability Calculator

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What will the monthly mortgage payments be?

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Use our Stamp Duty Calculator to see how much you could be paying in stamp duty.

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Required Documents Checklist

Use our custom checklist full of helpful tips and advice for people who are planning on buying their first home.

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**Your home may be repossessed if you do not keep up repayments on your mortgage. **

You may be charged fees for mortgage advice.
The fee is up to 1% but a typical fee is 0.5% of the amount borrowed.
The actual amount you pay will depend upon your individual case and circumstance.

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This is when a lender takes the basic information you have provided to them accompanied with soft credit search on you and decides if your profile passes the first stage of the mortgage application. If results come back satisfactory, they provide you with a maximum amount of how much you can borrow “in principle” based on this basic information and pre-full application approval.

If you have no personal deposit you can always get a direct family member to gift you the money for the deposit or you can also make use of products like Springboard mortgage, wherein the lender will allow your parents to deposit a set amount of money with the bang for a set period of 5 years and the lender will lend you the same amount to put towards your mortgage. Within the 5 years, your parents money accrues interest and at the end of the 5 years the money will be returned to your parents plus interest gained. Lenders Terms and Conditions apply.

First Time buyers

Find out how much you can borrow

Get an Agreement in principle

Choose your home and make an offer

Apply for a mortgage

Find and instruct a solicitor

Instruct Valuation

Mortgage offer issued

The Conveyancing Process

Exchange and complete!

Collect your keys....

5 main questions when getting a mortgage:

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Affordability Calculator

What will the monthly mortgage payments be?

How much Stamp Duty will I pay

Required Documents Checklist

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Frequently Asked Questions

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