This could be liaising with solicitors on your behalf, or even negotiating with estate agents. As well as securing you the most appropriate deal for your needs and circumstances, they can take some of the administrative burden out of the application process. If you’re a less traditional borrower, for example, you’re self-employed, older, have a small deposit, or poor credit rating, there are brokers specialising in all of those circumstances who can help you. They could even obtain an agreement in principle, which will help you to focus your property search on homes within your budget. Speaking to a mortgage broker ahead of your application will help you to get a better idea of which mortgage lenders would make the best use of your available budget (or affordability), based on your individual circumstances. This means that it’s perfectly possible for different lenders to offer you entirely different interest rates and/or loan amounts, depending on how they apply their criteria to your circumstances. Both how the loan figure is calculated, and how interest rates are decided on by each lender are determined by your individual circumstances. Your lender – Each lender has their own criteria and interest rates.Bear in mind that you will need a suitable repayment vehicle in place, however, as you will still owe the entire loan amount at the end of the term. As you only repay the interest with your monthly repayments with this type of mortgage, the size of mortgage you could achieve with a £1500 monthly repayment will be much larger. Interest-only mortgages are rarely used for residential purchases, but they are commonly used for buy-to-let and commercial properties. Mortgage type – Most residential mortgages are repayment products, which means that each monthly payment you make contributes to paying down an element of the actual capital you borrowed and the interest accrued that month.The majority of mortgages have an initial fixed-rate period at a lower interest rate, so you may need to remortgage once this period ends, in order to maintain the most efficient use of your repayments. If £1500 is your total budget, an element of this will need to be spent on interest repayment, depending on the type of mortgage you have. Interest rates – All mortgages incur interest, and this will need to be factored into your affordability.Mortgage term – The overall amount you could possibly repay at £1500 per month over 10 years is significantly less than how much you could possibly repay over 30 years of equal monthly payments.Once you’ve established that mortgage lenders would consider your expendable budget to be £1500 per month, and you’ve met the relevant criteria, there are still a number of factors that can affect how far your budget will stretch in terms of the overall mortgage figure you could obtain: Rather than approaching lenders directly, the smart way to establish where the best mortgage offers may lie for your budget is to first seek the help of an experienced mortgage broker.Īrmed with your budget, they’ll be able to identify who the best lenders are and whether there are any exclusive offers available that currently fit your target repayment amount.įactors that influence your £1500 per month repayments It should be stressed, however, that the key factors that will determine how much you can borrow for a mortgage will be your annual income and regular outgoings – these alone will be what lenders will focus upon when conducting their affordability assessments, rather than your monthly budget. *Interest rates are for representation only and will vary from lender to lender* Interest rates* All figures are rounded to the nearest thousand. We’ve also provided examples using a slightly higher, and slightly lower budget, for comparison. The below tables demonstrate how much the term length and interest rates of your mortgage could affect the total amount you could end up repaying on a typical repayment mortgage. How far your monthly budget of £1,500 can stretch will depend on two key variables, namely the term of the loan and the lender’s interest rate. What size mortgage can you get for £1,500 per month
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