12 Sep Ask the Expert – ‘How do I know which properties are within my reach?’
Ask the Expert
Q: I want to buy my first home, but how do I know which properties are within my reach?
A: Congratulations on making that decision! You need to get some sound financial advice. Understanding how much you can afford to pay for a new home is critical before you can start your search, so first, you need to find out how much you can borrow on a mortgage.
I’d advise, if you can, to buy as much house as you can afford without overstretching your monthly budget as you’ll have other bills to pay as well as a mortgage, and you’ll need a ‘cushion’ to cover any decorating and furnishings, and in case of rising costs, for example.
It all starts with the amount you have to use as a deposit, bearing in mind that this also needs to cover the cost of purchasing too – Stamp Duty, solicitors fees, etc.
Looking at your income and outgoings will help you to work out how much you can afford to re-pay on your mortgage every month. Then using those figures, you will be able to calculate how much you can afford to borrow – and more importantly, how much a lender will be willing to lend to you, as well as the amount of each monthly repayment.
Most lenders have mortgage calculators on their websites, but I’d advise you to make an appointment to sit down with an Independent Financial Advisor, who have access to the best available information and mortgage rates. I say an independent FA specifically because they should have access to the ‘whole of market’ rather than be tied to one specific lender. They’ll also advise if you’d be eligible for any government schemes to help you onto the ladder.
Knowing what you can affordably borrow and how much you have for a deposit, you can then work out how much you’re able to pay for your new home and therefore the properties within your reach, and you can start your search!
I would recommend that you don’t physically view any properties until you know how much you can spend – if you do this, you run a risk for disappointment when you’ve seen a home you really want, only to find that it’s outside your reach – there’s nothing worse!
If you do have any further questions, speak to your local estate agent for more advice. Find your local agent here 🏡