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Tag: high earners

  • Furness BS Expands Mortgage Criteria for Borrowers

    Furness BS Expands Mortgage Criteria for Borrowers

    Furness Building Society has announced significant changes to its mortgage criteria, allowing more borrowers to access higher loan amounts. This expansion is particularly beneficial for high earners and those looking to self-build, as it opens up new opportunities in a competitive market.

    TL;DR: Residential borrowers earning over £80,000 can now borrow up to six times their income at 90% loan to value; self-build applicants earning over £100,000 are also eligible. This change broadens access to financing for various borrower profiles.

    How Have Mortgage Criteria Changed?

    Furness Building Society has increased its maximum loan amount at 90% loan to value (LTV) from £750,000 to £1 million. This allows borrowers to secure larger sums, which can be important for purchasing higher-value properties. Additionally, lending on flats, including new-builds, now also qualifies for up to 90% LTV, expanding options for buyers interested in urban living.

    Who Benefits from These Changes?

    High-income earners stand to gain significantly from these new criteria. Residential borrowers earning more than £80,000 can borrow up to six times their income, while self-build applicants with incomes exceeding £100,000 are similarly eligible. Furthermore, borrowers purchasing a second residential property for a dependent relative can now access up to 90% LTV, increasing housing options for families.

    What This Means for Brokers and Borrowers

    Brokers will find these updates beneficial as they cater to clients whose financial situations may not fit traditional lending models. The removal of the £50,000 minimum income requirement for joint borrower sole proprietor (JBSP) applications also provides more flexibility. Additionally, enhanced deposit options through Forces Help to Buy and Own New, along with a broader range of permitted purposes for residential remortgage capital raising, further support diverse borrower needs.

    Frequently Asked Questions

    What is the maximum loan amount now available at 90% LTV?

    The maximum loan amount at 90% loan to value has increased from £750,000 to £1 million.

    Who can benefit from the new borrowing criteria?

    Residential borrowers earning over £80,000 and self-build applicants earning over £100,000 can benefit from the new criteria, allowing them to borrow up to six times their income.

  • NatWest Expands Mortgage Options for High Earners

    NatWest Expands Mortgage Options for High Earners

    NatWest has announced an increase in the maximum mortgage borrowing limit for joint applicants earning over £150,000 annually. This change allows higher earners to secure loans of up to 6.5 times their income, provided they are borrowing 75% or less of their property’s value. This shift is significant as most lenders typically offer loans of four to 4.5 times income, making it easier for high-income professionals to access the housing market.

    TL;DR: NatWest raises its mortgage borrowing limit to 6.5 times income for joint applicants earning over £150,000; this change benefits higher earners struggling with affordability in competitive housing markets.

    How Does This Change Affect Mortgage Borrowers?

    The increase in borrowing potential is particularly beneficial for those with household incomes exceeding £150,000. It allows these individuals to access larger loans, which can be critical in areas where property prices have surged beyond wage growth. For many, the difference between a 5x and a 6.5x income loan can be substantial, potentially enabling them to purchase homes in desirable locations without compromising on their needs.

    What Are Other Lenders Offering in the Mortgage Market?

    While NatWest’s new policy is a notable adjustment, it aligns with trends seen at other financial institutions. For instance, Nationwide has been offering loans at six times income, while HSBC has matched NatWest’s new limit of 6.5 times income. This competitive environment may encourage other lenders to reassess their lending criteria, potentially expanding options for borrowers across the board.

    What This Means for Higher Earners Seeking Mortgages

    For higher earners, this change could significantly impact their home-buying journey. Many professionals find themselves in a position where their income does not translate into purchasing power due to strict lending limits. The ability to borrow more can open doors to properties that were previously out of reach, particularly in high-demand urban areas. As Gaurav Shukla, CEO at Home Me Mortgages, noted, this adjustment will help those struggling with affordability despite strong incomes.

    Frequently Asked Questions

    What should I consider before applying for a mortgage?

    Before applying, assess your financial situation, including your income, expenses, and credit score. Understanding how much you can realistically afford to borrow will help you avoid overextending yourself.

    How can I calculate my potential mortgage repayments?

    You can use a mortgage calculator to estimate your monthly repayments based on the loan amount, interest rate, and term length. This tool can help you plan your budget effectively.