First-time buyer mortgage 5.5x income (22% more!) | Help to Buy alternative | Helping Hand mortgage
Can I Get a Mortgage 5 Times My Salary?
When it comes to securing a mortgage, most lenders will consider a borrower’s income and ability to make monthly payments. While there is no hard and fast rule with regards to the amount of money a lender will approve for a mortgage, it is generally accepted that a borrower should not borrow more than five times their annual salary. This is known as the “5 times salary rule”, and it is used as a way to determine a borrower’s ability to take on a large amount of debt and make regular payments.
The 5 times salary rule is based on the idea that a borrower’s total housing costs, including the mortgage payment, should not exceed more than 36% of their gross monthly income. This calculation is known as the debt-to-income ratio, and it is used to determine a borrower’s ability to make regular payments on their mortgage. The 5 times salary rule is based on the assumption that a borrower’s total housing costs, including the mortgage payment, should not exceed more than 36% of their gross monthly income.
Although the 5 times salary rule is a good guideline for borrowers to follow, it is important to understand that each lender has their own criteria for approving mortgages. Some lenders may be willing to approve a mortgage that is more than five times a borrower’s salary, while others may not. It is important to shop around and compare lenders to find the best terms and conditions.
In addition to income and debt-to-income ratio, lenders will also consider other factors when deciding whether or not to approve a mortgage. These include the borrower’s credit score, the amount of money they have saved for a down payment, and the type of property they are purchasing. It is important to note that some types of property, such as condos or multi-unit buildings, may require a higher down payment or a higher credit score in order to be approved.
When applying for a mortgage, it is important to be honest and upfront with the lender. Lenders will look into a borrower’s financial history and credit score in order to determine their ability to make regular payments. It is important to provide accurate information and to be prepared to answer any questions the lender may have.
Overall, it is possible to get a mortgage that is five times a borrower’s salary, but it is important to understand that each lender has their own criteria for approving mortgages. Borrowers should also be aware of their debt-to-income ratio and make sure they are not taking on too much debt.
Key Points:
• The “5 times salary rule” is based on the assumption that a borrower’s total housing costs, including the mortgage payment, should not exceed more than 36% of their gross monthly income.
• Each lender has their own criteria for approving mortgages, so it is important to shop around and compare lenders to find the best terms and conditions.
• In addition to income and debt-to-income ratio, lenders will also consider other factors such as the borrower’s credit score, the amount of money saved for a down payment, and the type of property being purchased.
People Also Ask:
Q. How much can I borrow for a mortgage?
A. The amount you can borrow for a mortgage will depend on your income, debt-to-income ratio, credit score, and other factors.
Q. Is it possible to get a mortgage more than five times my salary?
A. It is possible to get a mortgage more than five times your salary, but it will depend on the lender’s criteria.
Q. What is the debt-to-income ratio?
A. The debt-to-income ratio is the percentage of a borrower’s gross monthly income that is taken up by debt payments. It is used to determine a borrower’s ability to make regular payments on a mortgage.
Can I get a mortgage 5 times my salary? – Highest Rated?
I discuss Nationwide’s Helping Hand mortgage for first-time buyers, which is a viable alternative to the Help to Buy: Equity Loan scheme. It can be used to purchase existing homes, as well as new builds, and can increase the amount first-time buyers are able to borrow by 22%, by allowing homebuyers to borrow up to 5.5 times their salary, instead of usual maximum of 4.5. I cover the eligibility criteria, product availability and the potential impact on the UK housing market.
CONTACT DETAILS
Email: lemuelstudios@gmail.com
Instagram: @SelfInvested_UK
Twitter: @InvestedSelf
LINKS MENTIONED/USED
Nationwide Helping Hand mortgage – https://www.nationwide.co.uk/guides/news/all-news/2021/04/helping-hand-mortgage
95% Mortgage Guarantee Scheme – https://youtu.be/hE19TjU0D9E
How much can you afford with Help to Buy? – https://youtu.be/DT7C1HBAxII
OTHER PLAYLISTS
My Shared Ownership Experience (series) – https://youtube.com/playlist?list=PLUG_SDz9gLQKqInQrRbCC21S4pZpp4JrN
Shared Ownership – https://www.youtube.com/playlist?list=PLUG_SDz9gLQI3lKk_GIxi9Kgn_GeCaDDp
Help to Buy Equity Loan – https://youtube.com/playlist?list=PLUG_SDz9gLQJIBs_0uHERF90GRFLamKv_
CHAPTERS
Intro 00:00
Example 01:37
Eligibility Criteria 02:37
Availability 06:15
Who will this mortgage benefit 06:59
Key considerations 08:52
Outro 09:58
ABOUT ME
I’m Lemuel. I’m not a financial advisor. I’m not an expert. I’m just a regular guy that enjoys talking about how we can do better with money.
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DISCLAIMER
This video is not meant to address the specific circumstances of any particular individual. It is created for educational purposes only. You should not rely upon it as legal, financial or professional advice, or a substitute for it. Any product details mentioned in the video were correct at the time of filming. I do not accept any liability whatsoever for errors, omissions or misstatements contained therein. You should consult a suitably qualified professional if you require specific advice or information.