Is a mortgage right for me?

Is a mortgage right for me?





In the mid noughties, you only had to catch a mortgage lender’s eye for it to throw a mortgage deal at you, Is a mortgage right for me?.

Is a mortgage right for me?

You could borrowb whatever you wanted, sometimes shockingly even more than the home you were buying was worth.

Time and the credit crunch have changed things radically.

These days people still struggle to get mortgages, so much so the Government has even launched a range of schemes such as Help to Buy to try to push lenders to o er more.

So the starting point for rirst times is no longer about choosing the mortgage that’s right for them.

It’s about ensuring you’ll be chosen for a loan by a mortgage company at a rate that is a ordable for you

Is a mortgage right for me?

Is a mortgage right for me?

Can you really afford a mortgage?

Is a mortgage right for me?

First things first. This is a numbers game so before you do anything else, have a good look at your nances.

Use http://www.moneysavingexpert.com/moneymakeover to overhaul your  nances and work out what you can realistically a ord to pay every month.

Do your homework to nd out what’s available.

It’s important you do this before lenders do.

You can use www.moneysavingexpert.com/mortgagecalc to see how much your mortgage is likely to cost you each month. Think carefully about whether you can a ord it, and what would happen if interest rates went up.

The mortgage needs to be within your  nancial comfort zone; don’t push too hard, you just risk future una ordability and that can be catastrophic.

How much will they lend you?

Truly, loan specialists just increased your salary to work out the amount to loan you.

Typically, a single person could borrow four times their single salary while a couple would be o ered four times their joint salary.

Now it’s all about a ordability, Is a mortgage right for me?.

Banks take a gander at your pay contrasted with your outgoings (bills and different obligations) and work out how much extra money you have every month.

This can get tricky. Some lenders are so picky that even when you’ve paid debts o ( Is a mortgage right for me ) say, on a credit card — just before applying, they factor in how much available credit you have.

Or on the other hand they may consider you to be a higher hazard in case you’re utilizing the greater part the credit accessible to you.

They’ll also factor in all your credit card and loan repayments.

Even once they’ve done the maths, they’ll want you to have a cushion in case mortgage rates rise, and to ensure you’re not right on the edge of your  nances.

As a result, mortgage lenders will ‘stress test’ you on a higher mortgage rate, typically 6-7%, to check if you could still a ord to repay.

Expert’s Mortgage Moment

Renting isn’t a dirty word

“Must own, must own, must own,” has become a mantra of our age.

I remember meeting a 21-year-old couple while  lming who were upset they weren’t on the housing ladder yet.

Let’s make this plain. Owning a house is great, but not a necessity.

As the credit crunch showed, house prices can and do go down, both in the short term and the long term.

True, over the very long term it’s unlikely, but no one can predict the future.

If you’re buying a house to live in, the fact you won’t need to pay rent really does help the equation.

Yet don’t starve to do it.

Your overall  nances are more important, so make sure you can a ord the house and de nitely don’t overstretch yourself — if you think it may be a little much, take a step back and pause.

Not owning is better than getting repossessed. Better to wait a little until you’re secure.

Remember, renting isn’t a crime. In some circumstances it’s worse, but if house prices drop, it’s often the winner.

No one really knows, so don’t panic, Is a mortgage right for me?.

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