Can I Afford a second Mortgage

Could I afford a second mortgage?

Benefits of taking out a second mortgage: However, rule changes last year mean even with a decent deposit, anyone who wants to get a new mortgage must now prove they can afford monthly payments - now and in the future. Stage 2: What can I afford? As soon as you have chosen to buy a home, you need to find out your budget and how much you can rent. But before you begin to get your hopes up for this Dream Home, you need to find out how much you can afford to spend on a home. It will also determine how much you can take out for your mortgage.

One important first stage is to talk to a mortgage consultant. They crack the numbers from your incomes and expenses and give you a general picture of how much you can lend. Generally, you can assume that you can lend about fourfold as much as your total salary.

First payment - this must be at least 5% of the value of the apartment. A larger payment will result in lower prices. Length of mortgage - a mortgage usually lasts 25 years, but longer maturities are also possible. Recall that, with interest added, longer mortgage periods mean that you have a tendency to end up paying more.

Rates of interest - how well an interest that you receive largely hinges on how large your investment is, as well as how good your solvency is. To see how these three things affect your total amount repayable each month, use our Mortgage Calculator. Briefly, this is the percent of the value of a home that is secured by the mortgage.

If, for example, you want a £120,000 home and you make a down payment of 15% (£18,000), your mortgage provider will present the other 85% (£102,000). That LTV on this mortgage would be 85%. As a rule, this means that they raise the interest to protect themselves. So if you struggle to get a good mortgage interest because you can't get a large down payment, then the government's Help to Buy program could be an optional for you.

Helpdesk to Buy provides two major mortgage payment methods that allow you to get a mortgage with only 5% of your initial investment. And the second is when the goverment is acting as surety for up to 15% of the house value. It will reduce the risks for the creditor so that he can provide you with a 5% mortgage.

Now you should know about how much you can lend, what kind of down payment you are considering, and a general picture of your budget. The next step is to reduce your expenses and save for this security bond!

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