5 Things Lenders Look For
Learn more from Go2 Mortgages about what mortgage lenders look at when deciding how much to let you borrow.
As qualified mortgage advisors, the go2mortgages team have access to a wide range of lenders and banks. To help you with your application, we thought we’d share some of the top things for when reviewing your mortgage.
Lenders look at a number of different factors to determine firstly whether they will lend to you and if so, how much they will lend… There are steps you can take to prepare yourself for a mortgage application so you give yourself the best chance of success.
1. Salary
Often the starting point when discovering how much you can borrow. Usually, lenders multiply your income by around 4-5, but sometimes slightly more than this. Different lenders view additional income (such as overtime and bonuses) differently. Speak to the go2mortgages team about who looks at what.
2. Credit Score
Lenders check more than just the credit score. They check the details and notes within your credit history to see how you manage your finances. This will show your electoral roll, missed payments, CCJ (County Court Judgement) and address history etc.
3. Available Income
Put simply, this means how much cash you have left each month after your regular outgoings have gone out (for example; household bills, direct debits, memberships etc). Why do lenders care about this? The more available income you have, the lower the risk to lender.
4. LTV
Means “Loan To Value”
In simple terms, the more deposit you are able to put down, the lower the risk for the lender. This means the lower the deposit, the higher the mortgage rate, because there is an increased chance that the lenders money could be affected should the property value fall. The lower the LTV, the cheaper the deal.
5. Dependants
Children or anyone who is reliant on your income to live is classed as a dependant. Lender’s view dependants as an outgoing expense as they take away from your disposable income.
Contact Go2 Mortgages for more information on what a Lender Looks for
If you have any questions about any of these, please reach out to the team on liam@go2-mortgages.co.uk so we can help you secure your mortgage with the most appropriate lender, as quickly as possible!
