When you’re buying a home, it’s easy to focus on one question:
How much can I borrow?
But there’s another question that’s just as important:
How much do I actually want to pay each month?
A mortgage lender might be prepared to lend you enough to buy a £400,000 house, but that doesn’t necessarily mean you’ll be comfortable making the monthly mortgage payments.
Mortgage affordability isn’t just about the house price
When a lender works out how much you can borrow, they’ll look at things such as your income, regular financial commitments, credit history and the length of the mortgage.
That gives us an idea of your potential borrowing.
But just because you can borrow a certain amount doesn’t mean you have to.
Your mortgage is only one of your monthly expenses. You’ve still got things like:
- Household bills
- Car finance
- Food and shopping
- Childcare and costs for the kids
- Holidays
- Savings
- Your normal social life
You probably want some money left over at the end of the month to actually enjoy yourself as well.
Start with a comfortable monthly mortgage payment
When I’m helping someone work out what they can afford, I think it’s important to look at the monthly payment as well as the maximum mortgage available.
For example, we can look at different mortgage amounts, terms and interest rates to see how they affect your monthly payments.
You might find that you’re comfortable borrowing less than the maximum a lender is prepared to offer. Alternatively, changing the mortgage term could make a particular house price more manageable.
The important thing is understanding the figures before you start seriously looking at properties.
Buying your first home?
This can be particularly useful for first-time buyers.
If you’ve never had a mortgage before, it can be difficult to know what a £200,000, £300,000 or £400,000 mortgage actually means for you each month.
Speaking to a mortgage broker before you start viewing properties can give you a much clearer idea of:
How much you could borrow, what house prices you could consider and, most importantly, what the monthly mortgage payments could look like.
That means when you find the right house, you already understand the numbers behind it.
Speak to MortgagePal
If you’re looking for a mortgage broker in Newcastle, North Tyneside or Northumberland, or you’re buying elsewhere in the UK, I can help you understand your mortgage options and potential monthly payments.
Whether you’re a first-time buyer, moving home or looking to remortgage, we can go through the figures together and make sure you understand your options before moving forward.
Your mortgage made simple.
