Should I get a Mortgage or is it too risky?

There are many people that have mortgages but there will be some people that are reluctant to do so because of the risk. All borrowing does carry risks and so it is not an unjustified fear, but it is good to see whether you can rationalise it. There are a few risks and it is good to address them all.

What if I cannot make the repayments?

Covering the repayments on the mortgage is really important. If you miss a repayment then you will face extra charges. If you miss a lot of repayments you will end up having the property repossessed and you will be left with nowhere to live. Obviously, this is not a good situation to be in. The best thing that you can do to address this is to find out how much the repayments will be and work out whether you can afford them. Make sure that you really carefully study your income and what you normally spend to ensure that there will be enough left. Also consider whether you will be able to stick to a budget so that you can make sure that you will always have enough money. It is also a good idea to make sure that you will have enough money in the future. You will need to repay the mortgage over a long time, probably at least 20 years and so think about whether you think that this will be something that you will be able to afford.

What if the property devalues?

If the property goes down in value then it is possible that you will end up paying more money for it than it is worth and you may even make less when you sell it. This would be really bad if it was an investment. However, we buy a home to live in so it is not just the value that is important. We need to consider the amount of money we have saved in paying rent and the pleasure that we get from owning a property. It is also likely that if we keep the house for long enough the value will go up again as long as we keep it in good repair. It is also wise to think about the area that the house is in and how sought after it is. If you feel that it is in a good area, then it is probably more likely to hold its value than one that is not in such a good area. Of course, areas will go in and out of favour, so think about the location to such as how close it is to schools, shops and nature as this will not change and will impact the value as well.

What if I need to move?

If you need to move and you are renting then you just give notice and move out. If you own a home then you will have to sell it before you move, if you want to buy a new home to the place that you are moving to. This is tricky and expensive, but lots of people do it and some people even enjoy it or do it frequently. There is always the option of not selling the house and making it available for rental instead. This will allow you to keep it and not worry about selling it but still get some money from it which you can use towards paying the mortgage and the upkeep. However, if you think it is likely that you will move around a lot, perhaps because of the work that you do, then it is probably wiser not to buy until you know you can settle in one place.

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