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Income Multiples are nothing more than the lenders way of calculating how much they are going to lend you. For example, if the lenders criteria is 3 times your yearly income and your earning £20k a year, then £60k is the maximum they are going to lend you.

Unfortunately the number of times the lender will multiply your weekly or monthly salary depends on which lender you choose. In addition to this, remember, if you have regular outgoings such as loans, credit cards or maintainence the yearly total of the outgoing will be deducted from your income.

Important bits to remember!
Lenders will need proof of earnings, for those of us who are employed, they need the last three months payslips, P60, last three months bank statements and sometimes a reference from your employer. For self-employed they will need certified accounts, bank statements or even the last Inland Revenue assesment.

Self-Certification*.
Some lenders will allow you to certify that you earn enough money to pay the mortgage. You sign a declaration on the mortgage application form, that says exactly that. Some lenders will require permission to contact your employers to establish if you are employed and if your job is reasonably secure. In addition they will request copies of the last six months bank statements so that they can see the balance of the account, from month to month and assess if you can afford the payments. In certain cases a lender will make no checks at all and will take you at your word. Always remember we are here to help and guide you through this. If your not sure or need to talk it over either e-mail or ring us, its our job to help you in every way we can.

Below is a couple of examples for you to look at, these show you what we mean, always remember though, we are here to help, if your not sure email or ring us, we will be pleased to talk it over with you.

If there is a partner involved in the application the lender will usually take his or her income into account. The diagram below shows how this is done by the major lenders.

Your rate may be governed by your circumstances.
The overall cost for comparison is 9% APR.

The actual rate available will depend upon your circumstances. Ask for a personalised illustration.

Joint incomes diagram

If there is a partner involved in the application the lender will usually take his or her income into account. The diagram below shows how this is done by the major lenders. Income Partner one £15,000 x3 = £45,000   Partner two £7,000 x1 = £7,000   Amount for mortgage     = £52,000

 

2.5 times joint income diagram

If it is in the interest of the client, some lenders will use a different calculation, i.e. 2.5 times the joint income. The diagram illustrates this. Income Partner one = £15,000   Partner two = £7,000     = £22,000   Multiply by 2.5 = £55,000

Your home may be repossessed if you do not keep up repayments on your mortgage.

A fee may be charged for advising on or arranging mortgages of between 1 and 3% of the sum borrowed. The exact amount will depend upon your circumstances but we estimate it will be 1% of the loan amont.