If you’re buying your first home, you’ll need to know how much you can afford to borrow and how much you’ll need to save for a deposit. Your affordability will depend on your salary, your monthly outgoings and the size of the deposit you’ll have to put down – these may also have an impact on the interest rate you could be offered.
First-time buyer mortgage lenders use a range of criteria to judge your affordability and must obey strict guidelines to ensure you’ll still be able to afford your monthly mortgage repayments if interest rates rise significantly. Lenders will assess your income and expenditure – they’ll take account of big monthly bills and will want to be assured that you’re living within your means. Your outgoings checklist is likely to include your weekly food shop, bills, insurances, hire purchase payments, finance, credit card and debt repayments, childcare, entertainment, car and travel costs, etc.
Your prospective lender will want to see what your monthly budget comprises so, to give yourself a head start, try to boost your savings and watch what you spend in the months leading up to your mortgage application.
In the meantime, you can estimate the size of the mortgage you may need and use our handy mortgage repayment calculator to work out what your monthly repayments will be based on the value of your new home, your income and expenditure. Remember, you may be eligible for the government’s Help to Buy scheme, which will make your house purchase more affordable by reducing your monthly repayments.
Buying your first home can seem daunting so, when you’re ready to talk about mortgages, our team of expert mortgage advisors are on hand to guide you through it. Call us on 08454 500200 or click here to make an enquiry about first-time buyer mortgages and Help to Buy.