What can you afford?
So, now you've got an idea how much your property is worth. The next step is to work out how much you can afford to spend on a new house. A word of warning - the fact that a lender will let you borrow it doesn't mean you can afford it. In other words, don't be tempted to base your ‘affordability' decision on the monthly cost of your mortgage alone.
You need to take account of all your monthly outgoings too, so that you can be confident you'll be able to keep up the repayments. Here are the key things you need to include in your calculation:
- your total income
- any credit commitments such as loans and credit cards
- household bills and living expenses
- your mortgage cost – find out more about our mortgage range and details of monthly costs.
Sounds like hard work? Never fear. The trusty old Financial Services Authority have produced a helpful online calculator that will take you just a few minutes to complete.
How much can I borrow?
The amount we will lend is based on the amount we believe you can afford, but as a rough guide for most of our mortgages we will lend 4.5 times sole income for sole applications. For joint applications we offer 3.5 times joint income OR 4.5 times first income and 1 times second income.
Find out how much you could borrow with our online calculator.
Offer in principle
An offer in principle can give you the edge over other buyers who may be less well prepared. It's essentially a piece of paper from a mortgage lender that confirms to any potential seller that you're already several steps down the line with your mortgage application. It confirms that, assuming the information you give them is correct, they will 'in principle' give you the loan you have discussed with them. Having one means you should be able get the actual mortgage quicker once your offer has been accepted.
How to get an offer in principle
To get an offer in principle you'll need to decide which mortgage is right for you - find out more about our range of mortgages and arrange an offer in principle.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
