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When working out how much you can borrow, you should be realistic about what you, in your particular cirumstances, can afford.  To help you decide on the right amount you should consider the following.

• Your income.  It’s recommended that you plan to pay no more than 40% of your monthly income on your mortgage repayments after your other outgoings.  You may need to provide payslips, bank statements and/or HM Revenue & Customs documents to confirm your income and to help your broker decide what size mortgage is sensible for you to take on.
• Your outgoings.  You must think about your other financial commitments, and consider what efffect future interest rate rises could have on your finances.  This is to help guard against your mortgage becoming unmanageable.  When considering how much to borrow or how you would like to repay your mortgage, please remember that changes to your personal circumstances can alter your financial cirumstances as well.
•  Your age. You must be at least 18 years old to borrow money, and that includes taking out a mortgage.  Your mortgage term must end before you reach 75.  If you are aged 60 or over, or within five years of your planned retirement, we will only consider your retirement income.  If you are aged 60 or over, the maximum you can borrow is 75% of your home’s value.
•  Credit history.  Before you apply for your mortgage we’ll ask for your consent to search the information held about you and your financial arrangements.  Your mortgage broker should be able to provide you with further information as to what you will be asked to agree to.
•  The value of the property.  You’ll usually find that the mortgage rates available to you are more attractive if, financially, you’re putting something into the property yourself, rather than borrowing 100% of its value.  Most mortgage providers will be able to discuss with you the different rates depending on what percentage of the property’s value you want to borrow.
•  The valuation.  Once you’ve applied for your mortgage, the mortgage advisor is likely to visit the property to carry out a valuation.  You will probably need to pay a fee for the valuation, which is usually based on the value of the property.  You should remember that the valuation is not a full survey and is purely to help assess whether the property is suitable security for the loan.  It may not cover the things you would want to know as the home-owner, so you should not rely on it.  It is also important not to assume that just because a mortgage is agreed and the property has been valued, that the purchase price is reasonable, that the property is worth the amount of the mortgage, or that there is nothing wrong with the property.