What Size Mortgage Can You Get?

askpaul explains about borrowing for your mortgage:

 

In this video, we’re going to have a chat around cost of living and how it affects your mortgage application. One thing I get all the time off people, especially when they have kids is, Paul, do kids and the cost of children make a difference to your mortgage application, and how the mortgage underwriters actually assess the application if you have a few kids. I’m going to let you in on quite a few secrets behind the scenes of this one.

So, it’s no surprise, there’s a thing called cost of living. Each bank will have its own cost of living merits which will say how much an average adult should be spending, how much a couple should be spending, and how much kids would cost. Now, if you have kids, and you hear these figures, you’re probably going to laugh a little bit because they’re well below what they would actually cost you. But the whole idea is that you have a little bit of information before you go for a mortgage application trying to understand where the banks are coming from.

If we look at the figures, a single adult, they reckon a cost of living is €1,400. Okay, so that’s what you have to be able to provide yourself. If we’re talking about a couple, they say it’s €2,100 and, if you’ve a child, it’s €250 per child. So, what does this mean in figures? If you’ve got two adults, so a couple with one child, the cost-of-living expense will usually come up to around €2,350. That’s €2,100 for mum and dad, and €250 for a child which brings the total to €2,350. Now, what does that mean? If you have €4,000 coming into the house and, let’s say mom and dad are bringing €2,000 each in that house, that’s €4,000 into the house.

What happens is that you have to take your €2,350 away from your €4,000, and that leaves you with €1,650. That’s the maximum that a mortgage lender will allow you to be able to calculate what you can borrow for that amount of money. If you had two children, instead of being €2,350, it’s obviously going to be €2,600 and it means your stress or, your capability to pay, is now €1,400 rather than €1,650. So, it is actually quite important the number of kids you have when you’re applying for your mortgage.

Thanks for watching. As always, if you have any questions just hit me up no problem.

 Contact askpaul today for help in applying for a mortgage

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