ING’s Be Good at Money has six top tips for home loans that highlight some considerations before taking out a mortgage.
Individual circumstances will vary but, in general, it can be helpful to organise finances and reduce debt before taking out a mortgage – and to remember that there can be a difference between the size of the mortgage you can get and the size you want to get.
Spring clean your finances
Save up and try to reduce or pay off outstanding loans before taking out a mortgage.2
Ask what your lifestyle’s like
After defining what you ‘can’ afford, think about what you ‘want to’ afford. There’s more to life than paying off a mortgage, right?3
Add up the extras
Once you have calculated how much you can afford, don't forget to include home ownership costs such as insurance, property taxes and maintenance.4
Contemplate how your life might change over the next decade or so and ask yourself the question 'what if?'. It will probably lead you to build in additional emergency buffers, just in case you need them.5
Plan to repay
Think about how you want to repay the mortgage, how flexible your interest rate should be, and what level of protection you may require.6
Research, research, research
Compare offers from different providers and seek a proper explanation of any small print, fees and other charges.