How to get approved for a £300000 mortgage
With the average price of a property purchase in the UK is now around £250,000, and £270,000 in the Southampton.
So mortgage affordability is a topic that we regularly discuss with clients looking to purchase a home.
We have deal with this price bracket regularly, so in this article we explain how to get approved for a £300000 mortgage which could help you buy the house of your dreams.
We will go through monthly payments, what annual income you need to be earning & what credit history you will need.
For help finding the most competitive £300000 mortgage deals on the market, give the Alexander Southwell Mortgage Brokers team a call on 03300 432428, or email us at enquiries@as-mortgages.co.uk.
How do mortgage lenders decide whether they want to lend to you?
Each bank, building society and independent lender works to different eligibility criteria, each of the following factors will have some bearing on whether or not they decide to offer you a mortgage, and on what terms. Key pieces of information will need to be gathered prior to use working our affordability for £300k mortgage:
Your age
This can effect the amount lender can give to you as they need to make sure the mortgage term can be long enough to make sure the monthly payments are sustainable
Credit Score
Any Form of adverse credit could effect the whole mortgage process. Lenders that are available might limit affordability due to your credit rating.
How much deposit you have?
This has changed constantly throughout the last year due to COVID but the market has now stabilised. Your mortgage adviser should go through different options with you but there any many schemes which include 5% deposit options at the moment.
How much Disposable income do you have each month?
When taking out a mortgage your mortgage broker should run through a full budget planner prior to them providing any mortgage advice. Of course this critical when getting a residential mortgage as this will tell us what you can afford monthly.
What Salary Do I Need to Qualify for a £300,000 Mortgage?
Several factors apply, such as how a lender assesses your other debts and outgoings.
Most UK lenders will offer a limit of somewhere around four to five times your annual income – but others can offer as high as 5.5X, depending on how closely you meet their terms.
The below table summarises the maximum mortgage you might be offered by three lenders, each with a different income multiplier policy:
| Total Combined Salary | Lender 1 - 4.5 X Income | Lender 2 - 5.5 X Income |
|---|---|---|
| £40,000 | £180,000 | £220,000 |
| £45,000 | £202,500 | £247,500 |
| £50,000 | £225,000 | £275,000 |
| £55,000 | £247,500 | £302,500 |
| £60,000 | £270,000 | £330,000 |
| £65,000 | £292,500 | £357,500 |
| £70,000 | £315,000 | £385,000 |
| £75,000 | £337,500 | £412,500 |
| £80,000 | £360,000 | £440,000 |
It might seem obvious to some people but of course as your borrowing increases your monthly mortgage payments will increase.
It is definitely worth running these figures past your mortgage broker or running some mortgage calculators before securing your exact mortgage deal.
How Much Deposit Do I Need to Be Approved for a £300,000 Mortgage?
Your deposit will determine what sort of mortgage rates you will qualify for, as well as your likelihood of being approved for a £300,000 mortgage.
The higher the deposit, the lower the risk, and the better the rates on offer. Plus, you’ll own more equity in your home, so if you can afford to put down a higher deposit, it’s advisable to do so.
Higher Loan to Value mortgages are becoming more widely available, with LTVs as high as 90% or even 95% in the right circumstances.
I have bad credit history – can I get a £300k mortgage?
Clients with more severe credit issues such as CCJ’s or repossessions can find it difficult to find a willing lender (although there are always options), whereas less severe forms such as the odd late payment may be deemed acceptable.
After speaking to one of our advisors we will request your credit file to get your credit score & report and provide mortgage advice narrowing down which specialist mortgage lender is going to be most suited to you
For more information on this see our bad credit mortgages section, or make an enquiry and we’ll refer you to one of the experts who’ll be able to talk you through the mortgages available for borrowers with bad credit.
Can I get a £300k mortgage if I’m self-employed?
Being self employed doesn’t really make any difference in how much your can borrow.
There was a short period of time during COVID when residential mortgages were difficult to get for self employed clients but this is no longer the case.
As long as we can prove you income with SA302’s or accounts, you have a good credit score & a few other factors, many lenders will just treat how much you could borrow the same as any other mortgage application.
How much do I need to earn to get a mortgage of £300,000 on a buy to let?
Some buy to let mortgage lenders will expect you to earn a minimum of £25,000 per year in order to apply for a buy to let mortgage.
The mortgage itself will depend on what sort of rental income your investment property is anticipated to achieve.
Most lenders use a calculation to dictate the minimum mortgage payment cover that the rent needs to meet to be eligible.
What will my monthly mortgage payments be on a £300,000 mortgage?
The areas lenders look at for your affordability is your income vs outgoings.
The monthly payments are very dependant on your loan to value.
With a better loan to value LTV, you will qualify for cheaper interest rates. Which in turn means you will get cheaper mortgage repayments
They will stress test your financial state by checking how much money you actually have leftover after your outgoings such as utility bills, child maintenance, leisure activities and other factors.
They will take this away from your basic income and any guaranteed bonuses.
You can never be too proactive so plan ahead and estimate your monthly mortgage repayments now.
Following this, you will then need help putting a full plan of action together so make sure you get in touch for FREE mortgage advice.
Where can I find the best £300,000 mortgage advice?
Whether you are a first time buyer, homemaker, investors or looking for a joint mortgage we can find the right specialist lenders for you.
If you’re looking to get a £300k mortgage in the near future, your best chance of securing the best deal, competitive deal that suits your individual circumstances is to get in touch with one of our brokers, either via our contact form or by calling 03300 432428
Our expert advisors will match you with the right mortgage based on the current best deals and check your eligibility on your behalf.
This not only saves you the time and hassle of submitting multiple applications, but also the implications on your credit file if one is rejected.
