It’s a good idea to talk to lenders about mortgages as early as possible so you know exactly how much you can afford. You aren’t under any time pressure to make a decision, and being prepared means that you can move quickly once you have had an offer accepted. Your bank or building society are a good starting point.
The lender will usually start by talking through your individual circumstances to give you an idea of how much you can borrow. Lenders used to work this out based on multiples of your income – up to three times a sole annual income or up to two and a half times a joint annual income.
For example, if you earned £25,000 you could usually borrow £75,000 by yourself; or, if you were applying with a partner who earned £20,000, £112,500. Nowadays, you might find that a decision is based more on what you and the lender think you can afford and they will then give you a decision in principle. This outlines the amount you can borrow and puts you in a good position when you go looking at properties because it shows estate agents and vendors that you are serious.
Tip
Once your offer on a property is accepted, you need to get a formal mortgage offer arranged quickly. If you alreadyBefore you can apply for a mortgage, the lender must first provide you with a Key Facts Illustration. This is a document that tells you:
There are lots of different mortgages on offer – and plenty of information to help you choose one that suits you best. Take a look at this information to help you in 'Understanding your mortgage' or have a look at our range of mortgages.
