How Much Mortgage Can You Borrow? Setting a Realistic Budget When Buying A House

How much can I borrow for a mortgage?

How Much Can You Borrow For Buying a House? Setting a Realistic Home Buying Budget

How much can I borrow for a mortgage? It is easy to get swept up in the emotion and excitement of buying a house, and even though this is the question on most home buyers minds, it is important to remember that a mortgage represents a long-term financial commitment. The recent economic troubles experienced by most of the world’s major economies had their origins in the mortgage markets – a phenomenon that was partly caused by people taking out home loans they could barely afford to repay. By assessing your current financial status and attempting to predict the future, you can ensure that the process of buying a house doesn’t hamper your standard of living for years to come.

Assess Your Financial Position with a Mortgage Calculator

Most leading mortgage providers provide a mortgage calculator and also online budgeting tools which are designed to give people an idea of what they can afford.  You will need to input your essential monthly outgoings and the sources of your income – this information will be used to ascertain the sort of house prices that are within your reach.

Include the Costs of Moving in Your Calculations

As well as the expense of a new mortgage, moving house involves a lot of expenditure that must be budgeted for. You may have to find property to rent if your own sale completes before your purchase, and this could represent a significant expense you hadn’t initially accounted for. Conveyancing fees, mortgage arrangement fees and the cost of hiring a removals company will combine to create a significant upfront financial commitment, so using a moving house cost calculator and researching extra cost and setting the necessary funds aside is a very important part of the process.

Assess the Costs of Running Your New Home

The majority of home purchases will result in higher costs of living, so a little research when you’re trying to find a property for sale will be good preparation.  You can ask estate agents for a breakdown of utility costs, or speaking directly with the vendor may also be a possibility. If you’re upgrading to a larger, more expensive property, local council tax is likely to be higher. You must also consider the extra costs of heating and power a larger property.

It is always a good idea to seek a few insurance quotes on houses for sale before making offers. The cost of insurance can vary greatly, depending on the risk of flood, the value of the property, local crime rates and a myriad of factors that could be out of your control.

Look to the Future When Planning a Mortgage

Most mortgages were taken out over a period of 25 or 30 years, and that represents at least half of the average person’s working life. What you might think is affordable now, could become a crippling debt at some point in the future. So reflect on how much can you borrow for a mortgage as often unexpected costs and expenses can arise at any time, so borrowing up to the hilt might not always be a good idea. Mortgage rates could increase unexpectedly, and that could significantly increase your monthly payments. You may lose your job, or you might become ill for a prolonged period.

No one can predict the future, of course, but having a financial plan in place that covers every eventuality is always a good idea.

  • If you become sick, is your income protected by a personal or company insurance scheme?
  • How secure is your employment?
  • What are your chances of finding a new job quickly if you are made redundant or fired?
  • Does your chosen mortgage provider offer a payment holiday option?

While maintaining the ability to meet your monthly mortgage repayments is vital, it always pays to have a little something extra put to one side for contingencies.

Buying the home of your dreams should be an exciting time, filled with promise and hope for the future. However, selling a house may be a prerequisite to buying your new property. You may be wondering how do you sell your house for the most money and in the shortest timescale to enable you to buy another? Trying to sell before you buy another property is stressful and has the potential to delay your purchase. However, you could sell your house fast using Flying Homes’ unique property buying service.

We have access to hundreds of property buyers with cash available for speedy purchases, so you don’t have to negotiate the expense, delay, and uncertainty of the open market when selling houses. We can secure the sale of your property within days – leaving you to concentrate your efforts on finding your dream home. Call us now on 0800 68 99 420 for a friendly chat and advice on selling your home fast, see our reviews, and you’ll know that you are dealing with a reputable Company!