One: The base ingredients for mortgage affordability.
Lenders’ loan mandates are dependent on market conditions, written with specific adjustments for risk and, notwithstanding base money-market costs, risk adjustment affects pricing of the mortgage products being offered.
Two: A usual income and expenditure calculation mix starts with
• Payslips or, for the self-employed, Accounts
• Bank Statements
• P60 or, for the self-employed, SA302
Three: Some fibre is added from internal scoring, to which any of the following might be used
• OTE (on target earnings) calculations,
• Averages and annualizations – for the self-employed Accounting information is added to the mix.
Four: Finally, credit checks are usual before capacity calculations and debt to income ratios are added before all these ingredients are blended together,