When it comes to which Mortgage lenders are best for affordability we need to look at what it is you have to overcome. The answer to that will determine which Mortgage lenders are the best for you.
Do you have a lot of debt or high commitments?
Some Mortgage lenders have rules in place called “Debt to Income ratios”. The calculation for this can vary but ultimately the outcome is the same, if your debt exceeds a certain amount it would be an outright decline – even if it passes affordability on the Mortgage lenders affordability calculator.
If the issue is debt, then we firstly need to look at whether you are likely to fail these debt to to income ratios. If so, we can discount those Mortgage lenders and then start to look at the lenders who are happy to proceed with debt providing it passes affordability.
We also need to understand why the debt exists and ensure the underwriter is happy with the explanation and what evidence they are likely to ask for (if any) to back up what you say.
Higher than normal Income multiples
Mortgage lenders will typically top out at 4.5x income. This is a rule brought in by the regulatory powers.
There are exceptions to that however. For example there are lenders who will lend up to 4.8x income to anyone with a minimum 15% deposit. There are also lenders who can go up to 6x income for relatively newly qualified professionals in certain industries. There are other lenders who can go up to 5x income for applicants with no commitments, so you can see there are options but with small niche markets that they target.
The trick with anything like this is to understand your circumstances and the lenders rules in order to find the best lender for your circumstances.
Self Employed & Affordability
Best Mortgage lenders for Self Employed may differ to being employed as affordability checks are historically more challenging for certain self employed applicants.
Many self employed people, typically those who are directors of limited companies may take around £9,000 per year as wages and either leave money in the company (known as retained profits) or take the remainder of their income as dividends. It could also be that your company has had a large upturn in fortunes and so you would like to use a lender who will work off your latest years figures rather than an average of the last 2-3 years which is what most Mortgage lenders will do.
This is when the self employed resorted to self certified and non status mortgages. As the self employed pay themselves differently is presented problems but thankfully, whilst non status mortgages are no longer available, lenders have responded well to this common problem and as such are more accommodating and understanding.
Who is the best Mortgage lender for affordability?
As you can see from the above scenarios, there is no one single lender. It will very much depend on your circumstances, you may have 1 or more of the above scenarios to contend with or something we have maybe not covered off above. Added to that lenders do tweak their affordability calculations throughout the year depending on the type of business they receive and want going forward.
The best lender today may not be the best tomorrow and so typically our recommendations can vary throughout the course of the year depending on the changes in the market.
If you would like to discuss your situation and find the Best Mortgage Lenders for Affordability as related to your personal circumstances then please do get in touch.
We can get an idea of your individual circumstances before giving you an idea of how much you can lend, rates, fees and so on.