Budgeting to take on a mortgage

Taking on a mortgage to buy a home is a huge financial commitment and it is important for borrowers to factor in additional costs.

Once the decision to buy is made it is important to think about a budget and what is affordable. In order to get a good idea of what sort of home potential buyers can realistically afford, it is essential that all additional costs are added to the budget.

Although the actual price of the property may appear to be the only cost to a first time buyer, additional costs all add up. Many first-time buyers forget that there are costs such as mortgage fees and solicitors fees. According to a new report, many first time buyers do not take in to account these extra costs when budgeting for mortgage. Almost a quarter have no idea how many extras there are and, a small percentage do not even realise there are any additional costs at all.

Buyers should carefully consider how much they can realistically afford to borrow. Most lenders will offer up to three times a borrowers salary, some will lend more but at a much higher rate. It is important to understand that while a mortgage lender may tell a borrower they can afford a £250,000, it does not follow they should buy a property at the very top of their price range. Buying a home in a lower price range can make mortgage payments more reasonable and manageable.