When it comes to mortgages, Eminence Mortgages are the experts. We are here to provide you with all the information you need to understand how to apply for mortgages, give you tips on how to boost your credit score, and clear up any myths or misconceptions. Today we will be addressing the question of what mortgages are based on.
Before you apply for your mortgage, there are many things that you have to think about. Not just whether you can afford the monthly repayments, but mortgage providers also take a look at your income and expenditures to assess whether you will be able to make your repayments. They will be looking to determine whether if external factors change, such as rising interest rates, or any other change in circumstances, you can still pay back the loan.
To determine how much you should borrow, the lender will look at your basic income, or any other form of earnings including pensions, investments, child maintenance. This means that you must be able to provide evidence of your income through pay slips and bank statements.
In addition, you will also have to provide your outgoings. This includes credit card and maintenance repayments, insurance, loans, and bills.
Most lenders will base their mortgage affordability calculations on both your total monthly gross income and your monthly expenses.
One top piece of advice we can give you if you are looking to apply for a mortgage is to remember that your credit score matters. You should really take the time before you apply for a mortgage to get your credit report into good shape.