Max loan

How much can I borrow?

Up to 4.5 -5x income in general and up to 5.5x for high income earners and professionals.  It will depend on the following: 

  • Income
  • Credit Score
  • Credit & Loans
  • Other fixed expenditure
  • Number of Financial Dependents

Covid Alert

Currently due to covid-19 restrictions the maximum LTV across the lending market has been reduced.  Any rate you will obtain will not reflect the full market. 

  • No physical valuations of property
  • Restricted loan amounts.
  • Reduced income used for affordability if furloghed
  • Self employed face additional restrictions.
Whole market lenders

Which lender is the best?

When there are so many lenders in the market, how to choose the right one.

  • It is not always the rate. A lower rate with higher fees not always best.
  • Service standards.
  • Will they lend to you based on your circumstances.
  • Human underwriting.

Interest Rates.

First time buyer rates available from 1.21%.
Larger the deposit lower the rate.  Many first time buyer deals come with FREE valuations and legals.

  • Fixed rates to guarantee monthly payment.
  • Discounted rates for lowest monthly payment
  • Variable rates with no tie-in periods.

Affordability and maximum loan -how debt to income ratio and credit score affects income multiples.
Credit File for £2 – get credit file for £2 without monthly fees
Mortgages for LTD company Directors – how salary, dividends and net profit used in max loan.

On the Market – portal that allows agents to have greater control of propety listings.
Nestoria – aggregation from other property portals.
Nethouseprices – Past sale prices and estimated current values.
Prime Location – site run by zoopla.
PurpleBricks– online property portal with local agents.  
Right move – largest property portal in UK.
Residential People – free to list portal.
SmartNewHomes – another site bought by zoopla, but dedicated to new builds only.
Tepilo – site set up by TV presenter Sarah Beeny selling for a fixed price. May not give an advantage of less competition as the site says same properties will be promoted through RightMove and Zoopla.
Zoopla – Portal from a large conglomerate that owns many financial sites – potential duplicates with other big sites.

HMRC Stamp duty calculator
Monthly Payment Calculator (downloadable excel format)

Standard First Time Buyer mortgage

  • Covid Restriction – Maximum lending currently 90% with a restricted number of lenders.  Once the restrictions are lifted the is expected to revert to normal 95% LTV mortgages.
  • Standard FTB mortgage is a whole market mortgage for non-concessionary house purchases.
  • Financial help for family in the form of a gifted deposit is acceptable.  
  • Available to those who had not owned a property in the past.  Varies from lender to lender.  Some lender will treat non-ownership in the past three years as a First Time Buyer.
  • The rate is based on Loan to Value or LTV.  Higher the percentage borrowed higher the rate.  Special rates for FTBs.
  • Can be up to 4 applicants and does not need to be all family members. 
  • Many lenders provide free surveys and legal service

Family Guarantor Mortgages

  • Allows a First Time Buyer to borrow a higher loan than what standard income multiples would allow.
  • Guarantors can be grandparents, parents, siblings and step relations.
  • Several options available from providing a refundable deposit to having a charge over the guarantor’s property.  
  • Cannot own another property at the same time.
  • Income multiples of up to 4.5x for the applicant.
  • No adverse credit accepted. 
Three main types

1. Family Deposit Account

Members of the family provides a security deposit (up to 20%) which is returned once the value of the property increases or sold.  The deposit earns interest. 

Lender provides 95% loan for purchase. Applicant provides 5% deposit.

2. Family Offset Account

Family holds up to 20% of deposit in an offset account on their own name.  No interest is earned in the offset account. 

Lender provides 95% of loan and applicant 5%.  Interest is charged on 75% of the loan only, so gaining a saving on payments.

3. Family home as security

Lender takes a charge on parent’s / family member’s home and provide 100% loan for purchase. 

Affordability based on applicant’s income.  Applicant provides no deposit.

Example of a guarantor scheme: Family Offset Mortgage