Buying a home is one of the biggest financial decisions you’ll ever make and if you’re like most people, you’ll need a mortgage to help you get there.
A mortgage is a loan secured against a property that you take out and agree to pay back over a period of time.
It’s also a legal agreement, so you need to make sure you can keep up the payments each month.
If not, your home could be repossessed by the lender. So make sure you’re really comfortable with how much you’re planning to borrow, for how long – and from which provider.
When shopping around for a mortgage it’s important to do your homework and get to grips with some of the jargon involved.
For example, phrases like ‘arrangement fee’.
This is a fee you might have to pay your lender for setting up the mortgage.
Or ‘porting’ – which allows you to take your existing mortgage product with you when you move home.
You’ll probably hear people talk about a ‘deposit’ too.
This is money you’ll personally need to save up and put towards your home.
Generally, the larger your deposit, the better the mortgage rate or deal you can get.
When you’re just in the early stages of considering a mortgage though the main thing to think about is how much you can safely borrow – based on your income and what you’ll be able to pay back each month.
More often than not, it comes down to what you earn versus what’s going out for things like food, car bills, credit card payments and even child care, car loan payments and holidays.
This’ll give you a pretty good idea where you stand before applying.
And don’t forget to include some of the other costs of moving home like solicitor fees or just hiring a removal firm.
It all adds up.
If you need a little helping hand getting your first home it might be worth keeping an eye out for the Government’s Help to Buy schemes.
So now you know more about mortgages all that’s left for you to do is find a place to call home.