When assessing affordability for Luke and Jessica's mortgage, which of the following is true?

When assessing affordability for Luke and Jessica's mortgage, which of the following is true?

• A. The lender must use Luke and Jessica's actual committed expenditure, but can use reputable modelling for other expenditure.
• B. The lender must rely solely on income without considering expenditure.
• C. The lender will only consider mortgage payments.
• D. The lender ignores the applicant's expenditure history.

Answer: (A)

Affordability checks consider both income and outgoings to ensure a mortgage payment is sustainable. The lender uses the applicants’ actual committed expenditure—payments they are already obligated to meet, such as existing debts, rent or mortgage on another property, and essential bills. For other, more variable or discretionary expenses, they can apply reputable modelling to estimate typical costs. This approach avoids relying solely on income and ensures the total outgoings, not just the mortgage, are affordable. It also uses expenditure history to check consistency and avoid overstating affordability. So the statement that the lender must use actual committed expenditure and may model other expenditure best captures how affordability is assessed.

Affordability checks consider both income and outgoings to ensure a mortgage payment is sustainable. The lender uses the applicants’ actual committed expenditure—payments they are already obligated to meet, such as existing debts, rent or mortgage on another property, and essential bills. For other, more variable or discretionary expenses, they can apply reputable modelling to estimate typical costs. This approach avoids relying solely on income and ensures the total outgoings, not just the mortgage, are affordable. It also uses expenditure history to check consistency and avoid overstating affordability. So the statement that the lender must use actual committed expenditure and may model other expenditure best captures how affordability is assessed.