Why Do Lenders Need to do an Affordability Check?

Why Do Lenders Need to do an Affordability Check?

If you’re thinking about buying a home and starting a fresh new chapter, you’ll want to make sure your mortgage fits you just right. That’s where affordability checks come in – they’re all about making sure you’re not biting off more than you can chew, financially speaking.

Now, even though the official affordability and stress tests were scrapped back in August 2022, lenders still want to be sure you’ve got enough money coming in to cover your monthly mortgage payments without too much strain.

These checks help make sure your mortgage payments fit snugly into your monthly budget, so you don’t run into any nasty surprises further down the line. Let’s have a natter about why they matter and how they help keep everything ticking along nicely.

So, what exactly is an affordability check?

Well, it’s pretty straightforward really. Your lender takes a good look at your finances – what you earn, what you spend, any debts you’ve got, and so on – to work out how much you can afford to pay each month without stretching yourself too thin. That’s where the ‘affordability’ bit comes from – it’s just about making sure it all adds up.

Keeping You from Taking on Too Much

Nobody wants to end up with a mortgage they’re struggling to pay. That’s no fun for anyone. Affordability checks are there to help stop that happening – by making sure your monthly payments are something you can comfortably manage. It means you can stay on track with your goals and enjoy the journey to owning your own home, without too much stress.

On That Note… Ever Heard of Our Home Buyer App?

We’ve put together a handy little mobile app to help get you mortgage-ready. It’s like having a pocket-sized mortgage adviser, guiding you through saving, planning, and everything else you’ll need to get on the property ladder.

Whether you’re a first-time buyer or just looking to move, we’ll be there every step of the way, making sure you know exactly what’s going on.

Doing Things Properly

In the UK, affordability checks are just part and parcel of getting a mortgage. It’s all about lenders doing the right thing – being responsible and looking out for your financial wellbeing. After all, no one wants you stuck with repayments you can’t keep up with.

It’s Good for Everyone

These checks aren’t just about helping you – they help lenders too. If your mortgage suits your finances, you’re more likely to pay on time, and that keeps things running smoothly all round.

Knowing Your Limits (And Sticking to 'Em)

Think of affordability checks as your financial safety net. When your lender talks about them, it just means they’re making sure you’re not overstretching yourself and helping you build a solid base for your new home.

If you’re saving up for a place and wondering how you’d do on an affordability check, don’t be shy – give us a shout. We’ll help you find a mortgage that suits your needs and, if things aren’t quite there yet, we’ll point you in the right direction to get sorted.