Budgeting & Mortgage Planning
Before you even start looking for a new house or flat, it’s important to have an idea of what you feel you can afford. Whilst you’ll need to check with a qualified mortgage adviser when it comes the final figure, having an idea of the deposit you have available plus a list of your expenses and income will give you an idea of what you can afford. This will help you with the areas you can explore and the types of houses to have a look at, rather than falling in love with something that’s completely outside of your budget!
Depending on your circumstances, getting an “offer in principle” may also be required before you’ll be able to make an offer, so it’s important to make sure your numbers are in order.
Banks and mortgage companies take many aspects of your financial history into account, but in general, if you add up your monthly income and take off all your monthly outgoings, including general living expenses, you need enough left at the end of each month to comfortably afford the mortgage payments you are signing up for.
Mortgage budget planner
Go through your bank accounts for the last couple of months and itemise each expenditure into a category to get a better understanding of where your money goes (good advice even if you aren’t moving house). Don’t forget to remember annual costs – car MOT & servicing, holidays, Christmas gifts, any utilities or insurance policies that are not on monthly direct debits. Money Saving Expert also has some good advice, especially for first time buyers
If you’re renting, you don’t need to include payments that relate to the rental property, as these won’t be required once you’ve bought. However you will need to include buildings insurance for your new property plus contents insurance and policies such as life insurance and unemployment insurance if you don’t already have them in place (and if you do, make sure they cover your new situation).
Once you have these figures, we’d recommend having a chat to one of our advisers and they’ll be able to help you decide the best options for you.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE