Usually

you can borrow 4 or 5X one person's income or 3.5X joint income, plus your deposit but it varies by lender, you're best off shopping round or speaking to an independant mortgage adviser (banks only offer their own products). In this example based on £34,000 you could borrow £119,000, but most lenders ask for a 10-15% deposit on the purchase price. You would also have difficulty borrowing against a high-rise (4+ stories) or ex-council property.

There are two main types or mortgage, fixed term and variable. Fixed term is you have a fixed interest rate for a pre-agreed term (usually 2 or 5 years, unaffected by Bank of England interest rate rises or decreases), and then the interest rate jacks up at the end of it but people should re-negotiate a new deal. This is for people who like to know what they're paying. Variable means your payments will always go up and down depending on the Bank of England's interest rate changes. So your payments could go up as well as down from one month to the next, sometimes by a lot. Fixed terms are the best bet usually.

Hope this helps!

Posted By: Capital Canary on December 20th 2007 at 00:11:57

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