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If you are a resident
of the UK, and you have been thinking about purchasing your own
home, you may be a little overwhelmed by the variety of options
available. Many home buyers, including first time home buyers, find
the process of obtaining a mortgage quite bewildering. If this
sounds familiar to you, you might benefit from a bit of savvy UK
Before you apply for a mortgage, it is important to consider how
much you can reasonably afford to pay for a home of your own. Many
UK mortgage lenders will try to convince you to buy a more expensive
home than you can really afford; however, doing this will only cause
you financial stress down the road. Take an objective look at your
personal finances, and determine how much you can reasonably afford
to pay each month.
Making an assessment of your finances will also help you determine
which type of mortgage is right for you. There are a wide range of
mortgages available in the UK - choosing the right one will help you
comfortably attain home ownership; the wrong one can lead to
The two main types of home loans available in the UK are the fixed
rate mortgage and the adjustable rate mortgage. When obtaining UK
mortgage advice from a lender or broker, you will often hear that an
adjustable rate mortgage is the ideal solution, because you will
often pay a lower interest rate. This can be a good way for a first
time buyer to purchase a larger home than he or she could otherwise
afford; however, it is important to understand that the interest
rate on an adjustable mortgage can increase over time. This means
that your mortgage payments can substantially increase after you
purchase your home.
When you take out an adjustable rate mortgage, you are essentially
taking a gamble on your future earnings potential. As long as your
earnings increase, you will still be able to afford your monthly
mortgage payments; however, if raises and bonuses do not pan out as
you had hoped, your mortgage may become unmanageable.
For many consumers, it is better to go against the mortgage advice
of a UK lender, and choose a fixed rate mortgage instead. Your
initial interest rate will be a bit higher than with an adjustable
rate mortgage, but you will not have to worry about your mortgage
payments increasing over time.