It’s very important to consider and check your current and projected financial circ*mstances as they may have changed since you took out your original mortgage. You'll be fully assessed by potential mortgage lenders to make sure you meet their criteria, even when you’re keeping your current mortgage and transferring it to your new property.
In general, the average loan for home movers is 74% as opposed to 82% for first time buyers. That’s why it makes sense to work with an experienced mortgage adviserwho can help you to get the most suitable deal, whatever your credit score and affordability rating.
The affordability assessment is in two parts. First, the lender will want to see proof of income such as payslips and your P60. Check with your mortgage adviserwhat other sources of income can be counted as part of your incomings.
Next, your lender will need to see what your outgoings and expenses are. That could include credit card debts and loans, childcare, gym memberships, school fees, mobile phone contracts and other monthly bills. Your lender then deducts your expenses from your income and will attempt to stress Test your vulnerability to mortgage rate rises and other changes in your personal financial circ*mstances.
You can also expect your lender to examine your current lifestyle and include your monthly spend on items such as groceries, holidays and entertainment in the calculations. This helps them to understand the financial impact of any change in your finances.
Some lenders can also be selective with regard to the properties against which they’re prepared to offer a mortgage, including flats above shops or in high rise blocks.
At the Mortgage Hut, we can advise you as to which lenders are likely to accept you based upon your circ*mstances and the property you’re interested in purchasing.
