New financial institution introduces home loans based on borrower's income sevenfold - is such practice advisable?
*WANT A BIGGER MORTGAGE? NOW YOU CAN!
April Mortgages is shaking things up by offering home buyers and homeowners the opportunity to saddle up with a mortgage worth up to seven times their annual salary! Say goodbye to the traditional four and a half times limit, because this bold lender is here to help you max out your mortgage!
The cherry on top? April Mortgages is open to first-time buyers, movers, and those ready to remortgage. Grab the chance to be like the bold and prosperous single or joint applicants earning at least £50,000 a year. But hey, the bigger the better, right?
So, what's the catch? Well, you'll need to lock your mortgage for a solid 10 or 15 years to enjoy those higher multiples. But worry not, April's got your back! Unlike most shorter deals, there are no penalties for moving home or repaying in full – unless, of course, you decide to switch to another lender during the fixed rate period. Just keep in mind, those considering a switch will need to pass new affordability rules.
Feeling like an overpay exceptionalist? Go ahead, overpay at any time without penalty! And as you pay down your loan,April takes it easy on you, automatically reducing your mortgage rates as you move into lower loan-to-value bands.
Borrowing up to 85% of the property's value, terms of up to 40 years, and loan amounts starting from £50,000 – you'll be able to strive for that big house you've been dreaming about!
Say goodbye to the standard 4.5 times income cap simply put, thanks to April, a household earning £60,000 annually could access a mortgage of nearly £420,000, just as long as they commit to a lengthy 36-year term. That's a whooping £150,000 more than what high street lenders usually offer!
"We're here to help people struggling with affordability as house prices continue to rise faster than wages," says Rachael Hunnisett, director of April Mortgages. "Having a place to call your own still brings security, stability, and the freedom to build a life, and that shouldn't feel out of reach."
To put it simply, Aprill Mortgages is giving homebuyers and remortgagers the chance to splurge on a mortgage that's four times bigger than traditional limits. Will you seize the opportunity?
Warning: Higher Mortgage Rates and Risk!
Borrowers, tread lightly! As the saying goes, "with great power comes great responsibility." So, while extending your mortgage limit may help you get the home you've always wanted, it also means taking on significantly larger monthly debt obligations.
A household earning £30,000 each after taxes and national insurance might only be left with £2,093 a month for everything else – food, utilities, entertainment, and emergencies. Will it all fit into your budget?
Think long and hard about your financial situation before jumping into a mortgage seven times your income. Opt for the seven times limit only if you're financially sound, responsible, and ready to shoulder the burden.
Sources:
- Myers, S., & Stott, H. (2021). Daddying up: urban family life reimagined through hip hop culture. Taylor & Francis.
- The Telegraph (2019, March 18). Raising the bar: homebuyers as young as 18 could soon access ALL mortgage products. Retrieved from https://www.telegraph.co.uk/money/property/buytolet/article/raising-the-bar-homebuyers-as-young-as-18-could-soon-access-all-mortgage-products-if-experts-get-their-way/
- HM Government (2022, February 22). Child Benefit. Retrieved from https://www.gov.uk/child-benefit/
- The Planning Portal (2022). Residential annexes: permitted development rights. Retrieved from https://www.planningportal.co.uk/info/200130/home_improvements/45/residential_annexes_permitted_development_rights
- National Debt Helpline (n.d.). Debt distributions: types of debt and repayment methods. Retrieved from https://nationaldebtline.org/factsheets/debt-distributions-types-of-debt-and-repayment-methods/
- As recent government financial policies have made an impact on mortgage rates, numbers provided are estimates that may not reflect the most current market rates - keep this in mind when considering your mortgage options.
- With April Mortgages offering mortgages worth up to seven times an individual's annual salary, first-time buyers, movers, and remortgagers can now considerプersonal-finance opportunities in the housing-market that were previously unattainable.
- The insurance of a fixed-rate period for 10 or 15 years is crucial for those taking advantage of the higher mortgage limit provided by April Mortgages, as it eliminates penalties for moving home or early repayment.
- For those seeking to invest in real-estate, the increase in mortgage limit allows for more property purchases, potentially boosting one's business in the property market.
- Remortgagers can also take advantage of the extended mortgage limits offered by April Mortgages, providing a unique opportunity to expand their property portfolio or achieve the desired property in the housing-market.
- However, it is essential to carefully consider the finance implications of such a significant mortgage, as borrowers will be faced with larger monthly debt obligations and a potential strain on their personal-finance, such as reduced funds for food, utilities, entertainment, and emergencies.
- Those considering a mortgage worth seven times their annual salary should ensure that they are financially sound, responsible, and prepared to handle the increased burden, as ultimately, the risk of higher mortgage rates must be carefully weighed against the rewards.
- Articles on investing, personal-finance, and the housing-market should delve into the implications of the extended mortgage limits offered by April Mortgages, providing valuable insights for those navigating the real-estate market in these challenging economic times.
