Property is likely to be one of the biggest financial commitments you’ll ever make. Whether you’re saving for your first home, moving somewhere with more space, remortgaging or simply trying to manage the cost of the home you already have, the numbers can be substantial.
And the financial side of property extends far beyond the asking price.
Deposits, mortgage rates, legal fees, insurance, maintenance and moving costs all need to be considered. A home can be an important financial asset, but first and foremost, it’s somewhere to live.
At Metropolitan Mum, we take a practical approach to property: understanding what you can afford, preparing for the costs of home ownership and making decisions that fit your family’s finances as well as your lifestyle.
Work Out What You Can Really Afford
The maximum amount a mortgage lender is prepared to offer isn’t necessarily the amount you should borrow.
Your mortgage needs to sit comfortably alongside all the other demands on your household income, from childcare and food to transport, holidays and saving for the future.
Before deciding on a property budget, consider:
- Your monthly take-home income
- Existing debts and financial commitments
- Childcare and school-related costs
- Regular household spending
- The size of your emergency fund
- Expected changes to your income
- How much flexibility you want each month
It’s worth testing the numbers against a higher mortgage payment too. If rates increased when you next remortgaged, would the household budget still work?
A home should enhance your life, not leave every other part of it financially squeezed.
Build Your Deposit
For many buyers, accumulating a deposit is the biggest hurdle.
A larger deposit can potentially give you access to a wider range of mortgage deals and reduce the amount you need to borrow. But reaching your target can take years, particularly while you’re paying rent and meeting other househo