Questions to ask when buying a house

Taking out a mortgage is a big financial commitment and one of the biggest financial decisions you'll take in your life.

You face many choices, which is daunting when you've never done it before. To get you on your way, here are the questions you should ask yourself before committing to a mortgage. Reading this through should give you an idea whether you're ready to apply for a mortgage.

How much can I afford to pay each month?

A mortgage is a long-term commitment. You'll be repaying it every month probably for at least the next 25 years so it's essential that you borrow only as much as you can realistically afford to repay each month.

When you're working out your budget, remember to allow enough money for the pleasures in life, for a possible increase in your mortgage payments and for emergencies that might crop up - now and in future years. If your budget is too stretched, you could get into financial difficulties. This can have serious consequences.

Your mortgage is secured against your property and, if you fail to make your monthly payments, the lender could repossess your house and you'd lose the home you've worked so hard to buy.

Lenders won't give you a mortgage bigger than they think you can afford but it's still down to you to be honest with yourself about whether you're comfortable with the repayments.

How much can I reasonably save for my deposit?

That of course depends on your current income and cost of living expenses.

It helps to set a goal but that must be a realistic one. If you can't save as quickly as you thought, you'll become demoralised and might give up altogether. Our savings calculator shows how much you need to save each month to reach your target.

Usually, the more you put down as a deposit, the better mortgage deal you'll get. But, if house prices are going up at the same time, it might be better to pay a bit more for your mortgage and get on the ladder sooner.

You also need to bear in mind that your monthly mortgage payments aren't the only expense you'll be paying out. You need to include the other costs of getting a mortgage.

Save a regular amount that you know you can keep up over a long period. This will also help show lenders that you are able to manage your finances well. You can always add more to your savings when you have money to spare.

Look at our guide to deposits for more information.

Could someone guarantee my mortgage?

Having someone, who is usually a parent or close family member, guarantee your mortgage can help you get a loan if your own finances are a bit tight. You're responsible for the repayments but, if you fall behind, your guarantor has to pay them - until the loan is repaid andt hey are jointly liable with you for the debt.

Anyone acting as guarantor should get their own legal advice before agreeing so they're sure they understand their commitment and responsibilities.

Not many lenders accept applications backed by a guarantor and there are restrictions. Find out more information on guarantor mortgages.

Am I eligible for any government schemes?

It's a good starting point to look at the government schemes available for people who are finding it hard to buy a home, whether first time buyers  or those who need a bigger mortgage.

The Shared Ownership scheme is designed for buyers who can't afford all of the deposit and mortgage payments for a home that meets their needs. For more information, read our help for first time buyers.

Are fixed monthly payments better than a lower interest rate?

This depends entirely on your individual situation.

You should choose a fixed-rate mortgage if you want to know exactly how much you're going to pay for your mortgage every month for the next few years and be protected against any increases in the mortgage rate. This is a great help when your budget is tight.

But if you're confident you could afford higher payments if the rate went up, you should go for a mortgage with a lower rate of interest because you'll benefit if rates go down.

You can find more information about the different types of mortgage here.