What are criteria for getting mortgages

P

partnership

Registered User
Messages
595
Ok I know I am probably mad for even thinking this but it would help to have the correct information anyway so I can work towards it.
What is the criteria for getting mortgages now in relation to the amount you can have in loans?
The reason I ask is that we have quite a few loans (all of which we are repaying), an apartment overseas with a mortgage (which we are repaying) but we live in rented accomodation due to selling house and property prices rising etc.
Most of our loans (apart from mortgage on apartment) will be finished in 2014.
We do use our overdraft a lot and do have to watch what we are spending.
However I have seen a house beside the mother in law which is for sale and has reduced and reduced, it is 129000 and the mortgage payments would be about the same as the rent we are paying.
We are both in public sector jobs so secure from that end though were hit majorly by the reductions in pay and pension levy.
 
I imagine that the main criterion is affordability - i.e. can you realistically meet the mortgage repayments.

It's difficult to give an opinion on how you might fare in applying for a mortgage without a lot more detailed info (e.g. how much you might want to borrow, what your current liabilities are, what your net income is etc.) but based on what you have posted I would not be surprised if you had problems getting a mortgage purely on the basis that you seem to have a number of debts and are also regularly overdrawn. Even if your are meeting your existing debt repayments and the rent is about what you would be repaying on a mortgage. Lenders are obviously being a lot more cautious these days about lending money so will be looking for borrowers who can obviously afford to meet the repayments.
 
Thanks Clubman for your reply. I don't think I would get a mortgage but am looking to know what I need to aim for, is their an acceptable limit of personal loans or do you have to be loan free before you get a mortgage.
 
It really depends on your net income, how "safe" your income stream(s) is(are), what level of other/unsecured debt you have etc. Difficult to generalise I reckon...
 
Preferably debt free. Mortgage repayments will not normally be allowed to be more than 35% of your net income.

Speaking from personal experience, I was enquiring about a mortgage and have a car loan of €500 per month. This effectively brings down my repayment capacity by that much (e.g. if a person had a bring home pay of, say, €3500, amount of other committments is deducted from this, and then used to calculate available repayment capacity) Quite a shock when you see the difference it makes to the mortgage amount they could offer you! Advice would be to pay off all debts and then save, then apply.
 
Yes well debt free is always more attractive to a lender than the alternative.
 
You must log in or register to reply here.
Back
Top