Most people will never obtain a larger financial commitment than a mortgage, and therefore it’s a massive decision to make and consider all options. This post should help you to really think about whether now is the right time to apply for a mortgage.
The first factor to take into consideration is the monthly payment, as it is likely that you’ll have this commitment for the foreseeable future (unless you win the lottery!). When working out what your maximum monthly payment is, bear in mind there will be certain luxuries and necessities that you won’t be willing to sacrifice. You also need to be considering the worst-case scenario and to stress the monthly payment as if your payments rise in the near future.
Remember, DON’T push the boundaries on what is affordable or not, as you could potentially end up in financial troubles and all that hard work of saving up for your dream property could be gone in the flash of an eye.
Next off is the size of your deposit, as a lender will require you to put some of your own funds (whether this be a gift or from your own pocket) down and the rest will be raised through a mortgage. The mortgage rates are essentially determined by the size of your deposit, as the lenders will offer more favourable rates if you are willing to place more money as a deposit due to the reduction in risk to them.
Mortgage Schemes is the next part to consider, as there are government backed schemes which could work for people with lower incomes, or you could look to buy down the normal residential route. Buy-To-Let properties are different a government scheme is not applicable due to the properties being an investment rather as trying to get individuals on the property ladder. There are pro and cons to both routes, however a lot of the decision-making in this scheme will depend on your circumstances and you are best off discussing this further with your mortgage adviser.
Finally, the biggest question to ask yourself is whether fixed monthly payments are better than a lower rate which could fluctuate if interest rates were to change. This again will be up to individual circumstances as some people will want to know what they are paying out each month, where others concerns lie within the rate itself and aren’t concerned about increases in monthly payments should the rates go up.
The above is only a flavour of what to ask for, as there are so many different variables to consider when looking at possibly the largest transaction you’ll make in your life. At TR Financial, we know that it is tough to do this on your own, and we assess each person’s circumstances on their own merit. A quick phone call can help you work out what’s best for you and whether now is the right time to make your move.
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