| Those hoping to buy a new home or looking to | | | | existing debt, your regular outgoings as well as your |
| re-mortgage may be alarmed to hear that under new | | | | income. By reducing your overdraft and the balances |
| borrowing rules they may soon be unable to raise a | | | | on credit cards etc, the lender will presume that you |
| mortgage for more than three times their annual | | | | are more capable of coping with a bigger mortgage |
| salaries. | | | | and, consequently, they may be prepared to lend your |
| The Financial Services Authority (FSA) is already | | | | more. |
| pressurising lenders to implement these much tougher | | | | Put down the biggest deposit you can muster - The |
| lending limits and it is preparing a report, which will be | | | | bigger the deposit, the less the lender is taking. This will |
| due out later this year, on the subject. In response to | | | | also encourage them to consider a high ratio of lending |
| the credit crunch and falling property prices, all UK | | | | to income. So get saving! |
| lenders have already withdrawn 100 per cent | | | | Consider buying with someone else - If the lender is |
| mortgages, but the lending rules finally issued by the | | | | taking two persons salaries into account, and the |
| FSA are expected to ban anything over 90 per cent, | | | | person you are buying with earns more than you do, it |
| except in anything but the most exceptional | | | | should be possible get a bigger mortgage than if you |
| circumstances. | | | | were purchasing by yourself. But some mortgage |
| Currently, building societies and banks will lend up to | | | | lenders are more generous than others - so get an |
| four times income - with a couple being able to borrow | | | | independent mortgage broker to do some research |
| up to four times their joint salaries - that's provided | | | | first. |
| they have an excellent credit record and at least 10 | | | | A guarantor could help - If you are a first time buyer |
| per cent equity in their home. | | | | you will benefit from having a guarantor to underwrite |
| So what can homeowners do to boost their borrowing | | | | your mortgage. Lenders may well be prepared to lend |
| power. The following six tips should help both those | | | | a higher amount if they know a parent with a good |
| looking to get on the property ladder and those looking | | | | credit record, will guarantee to repay the loan in the |
| to re-mortgage to maximise their borrowing potential, | | | | event of difficulties. But be aware that there are not |
| even if banks do tighten their lending criteria. | | | | many guarantor mortgages remaining in the market, |
| Check your credit rating - The recession has forced | | | | but it is always worth talking to a lender about it. |
| lenders to tighten their mortgage lending criteria. At | | | | If all else fails, use your other forms of credit - You |
| present lenders are only lending to those people who | | | | can use credit cards, bridging loans, and personal loans |
| are the best credit risks. To maximise the chances of | | | | to make up any shortfall in your mortgage lending. But |
| you qualifying for a mortgage, check your credit file. A | | | | beware - interest rates will be much higher, and if your |
| copy of your credit history will costs just 2 pounds | | | | proposed lender feels you are overstretching, they are |
| from Equifax and Experian. When you get it ensure | | | | unlikely to make you an offer. So make a budget to |
| the record is both up-to-date and accurate - any | | | | be certain you can afford these debts. And also make |
| errors could damage your ability to qualify for any | | | | an allowance for interest rates to rise. There is no |
| borrowing. Speak to the credit agency about any | | | | likelihood of interest rates rising in the immediate future, |
| mistakes you find and they will be able to tell you what | | | | but as now when rates are as low as they can go, |
| you have to do to get the record corrected. They can | | | | the next change must be upwards. |
| then remove the erroneous and damaging information | | | | If you want to move house, now could be a good time! |
| and add an "explanatory note" to any previous | | | | Brokers Online offers great deals on Mortgages. This |
| problems. | | | | web site also provides articles and information on Debt |
| Reduce any debts - Lenders are increasingly using | | | | Management, Debt Advice, Debt Help, Debt Plans, |
| affordability criteria when they work out how much | | | | IVA's and Redundancy Insurance. |
| you can borrow. Affordability takes into account your | | | | |