Lenders use different ways to work out how much of a mortgage they will give you. The most important factor is your ability to repay the loan. Generally lenders take the following factors into consideration:
- Your income, the type and security of your job.
- Are you borrowing on your own or with someone else?
- Have you savings and / or any outstanding loans?
- Do you have a good credit history?
- Will anyone will act as a guarantor for you?
- What is the value of the property you want to buy?
As a general rule, most lenders will try to make sure that your mortgage repayments plus any other loan repayments you have don't go above 40% of your monthly take-home pay. They may offer you a smaller mortgage or offer you a mortgage over a longer term.
Remortgaging has changed dramatically over the past few years. For many years people used remortgaging as a means to finance a lifestyle. Banks were happy to provide this finance, however due to the downturn in the economy the reason behind remortgaging have reverted to more traditional ones.