Why you shouldn’t stretch yourself financially to purchase your dream home

Don’t give in to the temptation to buy a home you can’t afford. If you buy that budget-busting dream home, it will soon become a nightmare...

Purchasing a house and getting a mortgage is most likely going to be the biggest financial decision you will ever make. The mortgage could be tens of thousands or even hundreds of thousands of pounds, so make sure it’s the right one!

That’s why it’s vitally important to get professional advice and guidance for a suitably qualified mortgage broker before you commit to the purchase.

Many homeowners are tempted to make decisions they shouldn’t when they’re purchasing a home, like choosing the wrong rate, wrong mortgage lender, or worse still over stretching themselves without stress testing the mortgage correctly. This could have lasting financial consequences that could be avoided by utilizing a mortgage adviser.

An experienced mortgage adviser will help you find your ideal budget for a mortgage. This is based on a delicate balance between the mortgage payment and having enough left over to fund your desired lifestyle.

A great adviser also stress tests this budget to make sure you can still afford the mortgage if interest rates changed.

Mortgage companies are sometimes willing to lend you more than what a mortgage broker recommends, and anyone can find a home that costs a little bit more. It’s also way too easy to get caught up in this emotional side of home buying and stretch to purchase a property that’s out of your budget. But be careful… this does not always work out well in the long run. Your mortgage payment will become a source of constant stress, and every time the house needs some type of repair (and it will), you’ll feel like it’s the end of the world.

The best advice you can get is to stick to the agreed budget, and look for properties within that budget!

If you push your home-buying budget to the limit, you are almost certainly going to wish you had made a different choice.

Buying a house at the top of your budget means that even a slight reduction in your earnings could make your payments unaffordable. If you want to cut back on hours at work after having a family or take some time off to travel, you aren’t going to be able to do any of that. And if you get let go, you may struggle to find a well-paying job to continue to afford your housing costs.

You will also be devoting so much money to your housing payment that other things you may want to save for — like retirement or big purchases — could be out of reach. And you’ll be making your mortgage payment for a significant amount of time, so you’ll feel cash-strapped during the entire term of your mortgage product unless you manage to dramatically increase your income.

To avoid this financial disaster, be sure you stick to a mortgage that’s easy to afford.

Think carefully before securing other debts against your home as your home may be repossessed if you do not keep up repayments on your mortgage.

Talk to a reputable mortgage adviser who can help guide you through this process. It could be one of the best investments toward your new home that you will ever make!

Contact Us

Send me an email on justin@jffinancial.co.uk
Call me on 07813 255 267
Click here for our contact us link.