Subject to status and the value of the property, the majority of lenders use an ‘income multiple’ calculation to ascertain how much they will be willing to lend you.
Firstly the lender will look at your income but this can take into account many different factors:
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The income that will be taken into account in the ‘multiple calculation’ differs greatly between lenders and thus some will lend considerably more than others.
However, income is not the only thing taken into consideration when applying the ‘multiple calculation’. The Lender will annualise any loan, hp and credit card payments that you have and deduct this figure from your income.
They will now apply the ‘multiplier’ which is usually at least 3.25 X adjusted main income + 1 X second income. Alternatively, they will combine adjusted joint income and multiply this figure by at least 2.5.
If this doesn’t appear enough for what you need, don’t despair as there are a few lenders who will even lend beyond 4 X main income or even those that use an ‘affordability’ calculation instead of income multiples.
We will be able to seek out the lender that will be able to offer you the most suitable loan for your specific circumstances. Click here for one of our advisors to contact you to discuss your specific circumstances.