How much can I borrow?

It is important that we demonstrate that you can reasonably afford to repay the mortgage. The income multiples shown below are a guide to how much can be borrowed but the use of income multiples alone is not sufficient to assess whether the mortgage is affordable. The Society will carry out an Affordability Test to evidence that you can afford to make the required monthly repayments. Affordability will also allow us to consider cases outside the normal income multiples if the Affordability Test suggests the loan required is affordable.

Single		Joint
Income Below £12,000	Multiplier 3x	For joint applications, the multiple is based on 3.25x the combined joint incomes or the single income multiple of the higher earner plus 2x the second income.
£12,000 - £14,999	Multiplier 3.25x
£15,000 - £19,999	Multiplier 3.5x
£20,000 - £34,999	Multiplier 3.75x
£35,000 plus- £14,999	Multiplier 4x

Self Employed Applicants

For a sole trader or partner in a business, income is usually based on their share of the latest net profit figure.

For a director that owns more than 20% of a company, income is based on the latest remuneration for the director including pension contributions and dividends attributable to that director.

The Society normally expects trading for a minimum of 3 years.

We normally write to your accountant and request the last 3 years' accounts. Accounts must have been prepared and signed by a professionally qualified Associate or Fellow of a body recognised by the Society. If the accountant is not qualified, or if you prepare your own accounts, the corresponding years' tax returns and tax assessments/self assessments issued by H M Revenue & Customs are required.

Bonus/Overtime/Commission

These may be taken into account depending on your circumstances and their regularity. If payments are guaranteed, we normally add the annual gross total to your annual gross income. If payments are regular but not guaranteed, we normally use half of their value.

Credit Agreements/Loans/Other Commitments

We may reduce the amount you can borrow if we feel that by taking on a mortgage you would be over-committed. If we do take them into consideration, we normally deduct the annual cost from your gross annual salary.

Employment

We normally write to your current employer or accountant asking for details of your employment, and asking them to confirm details such as:

Length of Employment;
Job Title;
Basic Annual Income;
Details of any regular overtime, bonus or commission;
Whether you are under any form of notice or redundancy;
Confirmation that your employment is full time and permanent.

If you have been in your job for less than 6 months, details of your previous employment over a 3 year period will need to be obtained and confirmed.

Flexibility

If your circumstances do not meet the above criteria or if you are self employed and do not have 3 years trading accounts, please still contact us as we have flexibility to consider all applications on their merits subject to credit assessment and ensuring the loan required is affordable.

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