How To Get A 200K Mortgage?
In recent years the options open to you if you are looking for a £200,000 mortgage have increased.
While many lenders will offer a mortgage with a 5% deposit some now provide options where you can use equity in a close family members house to help you get on the property ladder.
Things to be mindful of include:
- Lenders are keen understandably to ensure at the end of the mortgage term the loan will be repaid. Criteria for lenders will vary but all will want to understand how you intend to pay off the mortgage at the end of the term. If you opt for a repayment mortgage, your monthly repayment will include a portion of capital repayment. With an interest only mortgage you will need to have an alternative repayment strategy.
- A repayment vehicle strategy will be required. Some lenders will accept sale of property as a way of paying off the debt. Some will want to see a saving plan such as regular investment into ISAs or investment vehicle. Where sale of property is not acceptable to lenders, they will often want to see statements of your investments as evidence that a repayment vehicle is in place.
- Lenders will want to ensure your income supports the mortgage repayments. Most lenders work on an income multiple basis (typically up to 4.5 times annual salary)
- Previous credit history - If you have had credit blips in the past this may effect the rate of interest offered to you.
A key consideration for lenders is affordability when they lend. In assessing whether an interest only mortgage is right for you income criteria will come into play.
For example for a £200k mortgage, a lender typically would need to see a minimum income between £40,000 to £50,000. Some lenders offer higher income multiple mortgages for professionals e.g. doctors or lawyers.
This criteria will vary so if you are unsure speak to a broker such as ourselves will help you get the right deal for your circumstances.