Getting a mortgage

Owning your own property is a very British thing to do – an Englishman’s home is his castle. In Europe this is not the norm but it is catching on. Property is seen as a safe place to put your money and there is a great deal of pressure on young people to get their foot on the property ladder.

How do you get on the property ladder?

The reality is that most people who want to own their own house do so through getting a loan to pay for it and this loan is called a mortgage. You pay an agreed sum each month for an agreed time and at the end of it you own the property. Most people borrow this money for a 25 year period and spread the payments over their lifetime.

How much can I borrow?

In the current financial climate you will need to put down a deposit – usually 5% of the property value.

You can usually borrow between 2 - 5 times your gross income if you are buying on your own.

Do not overstretch your finances. Make sure you have enough money left each month to actually live on. There are too many stories of people mortgaging themselves up to their necks and not being able to afford to go out and enjoy themselves. It is clearly your call but we suggest that you try and create a balance to ensure that you can still go out for a few pints as well as paying your mortgage.

TOP TIP: Contact your local housing association to see if they can help you buy a property. www.housingcorp.gov.uk

TOP TIP: If you can afford to pay extra payments each month without negatively impacting your financial situation then do so. You may find that you can shorten the time taken to own the place which will mean less interest paid, saving you money.

TOP TIP: Consider renting a room out for extra cash to help you cover your mortgage payments.

++ Mortgage Plus’s ++

• You are paying towards the ownership of your own property
• You are not paying someone else’s mortgage off as you are with renting.
• The value of your property should increase over time – you should make a profit.
• You are not in the hands of useless or money grabbing landlords.

How do I ... buy a house?

Playing the numbers game...