Getting a mortgage is one of the most expensive debts you’ll have to deal with in your lifetime. Having a home to yourself does have its perks, but it comes with a huge responsibility. First-timers are often at a disadvantage to real estate owners as the property market is considered competitive with house prices skyrocketing in the past couple of years. With just one small slip in the contract, you might be making a more profitable choice for the owner if you’re not too careful. Since it’ll take weeks of accounting for you to figure out if you’ve made the right decision or not, here are three questions that you should ask yourself before you sign any mortgage papers.
Can you afford the property?
It sounds a little bit nonsensical, and you might even think that it shouldn’t be one of the main questions you should ask before you secure a mortgage, but it carries a lot of weight. You need to identify if you can genuinely afford the mortgage you’ll be taking on. One of the more reliable ways to calculate if you’re eligible for a mortgage is having a test run.
How do you do it? Record your list of expenses at the beginning of the month for up to four months. Record every receipt, from groceries, parking tickets, to monthly bills. Scratch off a little bit of allowance on the side in case you need to take out cash in case of emergencies. Match those numbers with your monthly salary, and you’ll have a pretty good average of your quarterly expenses for a year.
If you have five digits as an average in your savings within the four months, then you might be able to take a mortgage on a small house.
Will your living expenses be sustainable?
Besides considering your current expenses, you also need to take into account your growing living expenses. Your salary might be receiving a minor bump every month, but you’ll have to accept that property prices also increase and so do interest rates. Estimating your potential expenses may be complicated, but it doesn’t hurt to keep an eye on market trends and local news outlets with regards to the housing economy and how you can prepare for sudden rises and falls in prices.
Have you found the right deal?
The most common choice to get a mortgage for a property is through a bank. But more and more people are looking towards finding mortgage broker services like those found at mortgage-wise.co.uk to help them in finding a more negotiable deal. Having a broker assist you in finding an agreement won’t just give you a viable second opinion, but it can also save you a lot of cash in the long run. A broker can even discern if the lender you’re dealing with is asking unfair fees and costs that are the usual con of unfair lenders. The small retainer for having someone watch your back can be the best use of your hard-earned money.