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Purchasing your first home is a major milestone. But since rates increased last year, getting a mortgage has grown more expensive. According to data from Moneyfacts, the average cost of a five-year fixed-rate mortgage has increased from 3.01 per cent in April 2022 to 5.05 per cent in April 2023, after more than a decade of historically low interest rates. However, house prices have decreased as a result of the rise in borrowing costs, which may work to buyers’ advantage.
Mortgage lenders often allow you to borrow up to 4.5 times your base wage.
A mortgage of up to £360,000 would be made available to a couple making a combined £80,000. Professionals like lawyers, doctors, and dentists may occasionally borrow up to six times their annual pay.
However, if you work for yourself, lenders adopt a different strategy and examine your revenues to determine whether you have a steady source of income. Usually, two or three self-assessment SA302 forms displaying annual tax calculations are required.
The amount you can borrow may be impacted by the cost of your regular credit obligations and monthly household expenses, which will also be included in the evaluation.
In general, you will need to put aside a deposit equal to at least 5% of the purchase price and then take out a mortgage loan for up to 95% of the value of the home.
Some banks will provide a mortgage of 100% with a guarantor, so you won’t require any down payment. However, if you are unable to make your payments, a family member or friend may have to put up their own assets as security. If choosing to save, customers must give the mortgage lender savings equal to 10% of the purchase price for a period of about three years.
Lenders like Barclays, Family Building Society, and Lloyds Bank provide family mortgage options.
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Whilst our solicitors are based in one location, we are always happy to try to make an appointment to meet you in any of our office locations, if this is more convenient for you.
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Gregory Abrams Davidson Solicitors and GAD Commercial are trading names of National Law Partners Limited, registered in England and Wales under number 08312439 and are Authorised and Regulated by the Solicitors Regulation Authority, under number 646548. Gregory Abrams Davidson Solicitors registered office: 20-24 Mathew Street, Liverpool, L2 6RE. VAT Registration Number: 290 6677 68.