One of the first questions most people ask when starting their mortgage journey is:
“How much can I actually borrow?”
The honest answer is that it depends on far more than just your salary.
While income is obviously important, lenders will also look at things like:
• Your monthly commitments
• Credit history
• Deposit size
• Employment type
• Existing debts and credit cards
• Dependants and household costs
• Overtime, bonuses or commission
• Self employed or CIS income
This is why online calculators can sometimes give figures that are either unrealistically high or surprisingly low.
Two people earning exactly the same income can sometimes receive very different borrowing amounts depending on their overall circumstances.
For example, self employed applicants and CIS contractors are often assessed differently between lenders, with some taking a far more flexible approach than others.
Likewise, somebody with strong affordability but unusual income may still have good options available even if one lender declines the case.
An Agreement in Principle can often be a useful first step because it helps provide an indication of what may be achievable before a full application is submitted.
However, it is important to remember that an AiP is not a guaranteed mortgage offer, and the full application process will still involve document checks, underwriting and lender assessment.
One of the most valuable parts of mortgage advice is often helping people understand what is realistically achievable before they start viewing properties or making bigger financial decisions.
If you are unsure where you stand, having an initial conversation can often provide clarity very quickly.
