How much can I borrow for a mortgage? It is easy to get swept up in the emotion and excitement of buying a house. Even though this is the question on most homebuyers minds, it is essential 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. This phenomenon 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 online budgeting tools designed to give people an idea of what they can afford. You will need to input your essential monthly outgoings and your income sources to ascertain the house prices 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. For example, you may have to find a property to rent if your sale completes before your purchase, representing a significant expense you hadn’t initially taken into account. Additional fees may be incurred, such as for conveyancing, the mortgage and removals. These are a substantial upfront commitment. So using a moving house cost calculator, researching the extra expense, and setting aside the necessary funds, is an essential part of the process.
Assess the Costs of Running Your New Home
Most home purchases will result in higher living costs, so a bit of 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 higher. It would help if you also considered the extra costs of heating and power a larger property.
It is always good 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 property’s value, local crime rates, and many factors that could be out of your control.
Look to the Future When Planning a Mortgage
Most homebuyers took mortgages out for 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 in the future. Reflect on how much you can borrow for a mortgage as 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 home 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 through a Flying Homes quick sale firm.
We have access to hundreds of property buyers with cash available for speedy purchases, so you don’t have to negotiate the open market’s expense, delay, and uncertainty when selling houses. Instead, we can help you secure the sale of your property within days – leaving you to concentrate your efforts on finding your dream home. So call us now on 0800 669 6784 or complete the enquiry form.
