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How much can I borrow?

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How much you can borrow depends on:

Your income, outgoings and any expected changes to these.

Your credit history.

Whether you’re able or prepared to make changes to your lifestyle that may reduce your other outgoings.

How much deposit you can afford.

You will need to find out how much you can borrow before making an offer on a property. Some lenders will work out how much they’ll lend you before you find a property – this is called an approval in principle. This will help you know the maximum offer you can make on a property and will also speed up the mortgage process.

Lenders usually base their calculations on your guaranteed earnings such as basic pay, but most will also consider some or all of any regular overtime or bonuses. They will want to see proof of your income.

Consolidating Debts

If you have existing debts, it may be possible for you to add these to your mortgage rather than continue with your existing repayment arrangements. This is not suitable for everyone and you’ll need to carefully consider this with your adviser. When you add loans to your mortgage, it is important that you understand the risks:

Adding short-term loans to your mortgage means you will repay them over a longer term. This is because unsecured loans are generally paid back over a shorter term than mortgage loans. So, while the interest rate on your mortgage may be lower than you currently pay on your loans, by adding them to your mortgage you’re likely to pay more overall. Therefore it may not be appropriate to consolidate small or short-term debts.

Your existing debts might not be secured on your property. By adding them to your mortgage they become secured on your property.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

If you’re having difficulty paying your loans, it’s worth speaking to your creditors to see if you can negotiate better terms before considering adding them to your mortgage.

Further Advances

If you need to borrow more money in the future it may be possible to do this by way of a further advance. Your adviser will have more information on this if you’re interested.