Credit Advice – How much can you borrow

Lenders have introduced affordability models to help them decide how much money can be lent instead of looking at straightforward income multiples.

For the right people these could work well as they focused on levels of disposable income and, in theory at least, reduced the likelihood of their defaulting on the loan as it was shown that they could afford the repayments. But following the credit crunch lenders have become more cautious again and started to demand that borrower’s put more of their own money down on properties as a deposit, 25% of the property value is now often a common pre-requisite.

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