Choosing the right mortgage

Before applying for a mortgage, you need to think about more than just whether you can afford the monthly repayments. After completing a fact find to find out more about you, we will discuss what features and benefits are important to you and ensure that you apply for the correct mortgage in terms of rate, mortgage term, mortgage type, repayment method and cost.

PAD Financial can help you negotiate the house buying process by first advising you on the most suitable mortgage from the whole of the market and then liaising with the other parties involved in the transaction to ensure that your purchase is as stress free as possible.

If you would like to know how PAD Financial can help you, please contact us now.

What the lender takes into account

When working out how much you can afford to borrow, lenders will look at:

  • Your basic income
  • Income from your pension or investments
  • Income in the form of child maintenance and financial support from ex-spouses
  • Any other earnings you have – for example, from overtime, commission or bonus payments or a second job or freelance work

You will need to provide pay slips and bank statements as evidence of your income.

If you’re self-employed you’ll need to provide:

  • Bank statements
  • Business accounts
  • Details of the income tax you’ve paid
  • Credit card repayments
  • Maintenance payments
  • Insurance – building, contents, travel, pet, life, etc.
  • Any other loans or credit agreements you might have
  • Bills such as Water, gas, electricity, phone, broadband

The lender might ask for estimates of your living costs such as spending on clothes, basic recreation and childcare.

They might also ask to see some recent bank statements to back up the figures you supply.

The lender will assess whether you’d be able to pay your mortgage if:

  • Interest rates increased
  • You or your partner lost their job
  • You couldn’t work because of illness
  • Your life changed, such as having a baby or a career break

It’s important that you also think ahead and plan how you’d meet your payments.

For example, you can help to protect yourself against unexpected drops in income by building up savings when you can.

Try to make sure it contains enough for three months’ outgoings, including your mortgage payments.