However,a number of lenders have a 'Higher Lending Charge' scheme in place. A Higher Lending Charge is a further second loan usaully offered to first time buyers on a subject to status basis (i.e your credit rating - see below), with interests rates calculated seperately to that of the mortgage.

Income Multiples:

The LTV described above is referred to determine the borrowing ceiling (the maximum amount a lender will finance),but in most cases particularly medium to low income earners, a different set of rules will apply in determining the maximum amount that can be lended to an applicant.This is known as the income multiple.For example,a mortgage lending criteria may state it will lend up to 3 times an applicants current gross pre-tax annual salary.Joint applications will often have a slightly different set of rules but it is normally possible for joint borrowers to achieive a slightly further increase in borrowing power than a solo applicants.For demonstration purposes lets say somebody on an income of £12000 per annum will be turned down for applying for a £95,000 loan,because the most they could receive in finance in according to the lending criteria with an income multiple formula of x3 the applicants gross income would amount to £36,000.

Affordability:

Your mortgage/financial advisor will run through your monthly spending habits to ensure that there is enough surplus income to cover the the additional expense of a loan and in turn the new costs associated with a house like
council tax and water rates.In practise only up to around 35% of a borrowers total monthly income should be spent on repaying the loan installments.

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