2nd-Mortgage

The amount of money a person could borrow depends mainly on the lender. This is because different lenders offer different amount as loan for the same borrower. But generally the amount a person could borrow depends on three factors (How much you can borrow with a mortgage in UK, 2007).

1. The borrower’s annual income: The amount a borrower could borrow is usually three and a half time of his annual income. If a couple is applying for the loan, it would be two and a half times of both the income together. If the borrower is having more than one job, then he could borrow three to three and half times of the annual income of the job with greater income and a single year’s income of the second job.

2. The value of property a borrower wants to buy: This also depends on lenders’ decision. Generally up to 75% of the value of property would be given as loan. Sometimes it may go up to 95-100%, but interest rate would be high. The value of the property would be assigned based on the area, type of property, etc. If it is a well constructed house, the amount may be more compared to a house boat.

3. The amount a borrower could afford to repay: This is a decision solely taken by the lender after assessing borrower’s expenses. A singleton may get more amount as loan than a person with a family with the same salary.

The quickest way to find out the amount of mortgage a person could get would be to approach an independent mortgage advisor. Even for a person with a bad credit history might get a mortgage provided the interest would be high (How A UK Adverse Mortgage Can Keep You Debt Free, 2007).

Thus, the amount of mortgage a person could get depends on the financial position and credit history of the person, his family or dependents, his previous cash dealings and also the value and type of the property he wants to buy. Finally, it also depends on the lender who takes the ultimate decision.

References:-

How much you can borrow with a mortgage in UK (2007) [online] available at: http://www.mortgagesorter.co.uk/mortgages_amount_you_can_borrow.html (accessed on 10/11/07)

How A UK Adverse Mortgage Can Keep You Debt Free (2007) http://www.adverse-mortgage-centre.co.uk/uk-adverse-mortgage.html (accessed on 10/11/07).