Are you ready for the expense of home ownership?

March 19, 2017 by Brendan

Advice & Tips

Buying a home is the dream for many people, and you work hard to save a deposit for your first house. However, the financial responsibility doesn’t end with the mortgage, as there are lots of other extras to budget for.

If you rent a house, you may believe that the cost of rent should be used as a guide for affordability checks, but as a tenant you don’t have the responsibility of paying for any repairs or emergencies, like a burst water pipe. As a home owner, you are responsible for all the repairs, and finding the spare cash to pay for a replacement boiler, or a flood in the kitchen, can be extremely difficult, especially if your mortgage payments are high.

One option is to take out home emergency cover, which is a type of insurance which covers you for a boiler breakdown, or faulty electrics. However, the monthly cost can be quite high, and you may only be covered for an initial repair, while further work needs to be done at your expense. You may also consider using a credit card to pay for emergency work in the home, but you will incur high interest charges and fees, which will add another monthly expense to your budget.

Prior to buying a home, set up an account where you have the equivalent of three months salary, so that you are covered in an emergency. You may also want to consult a mortgage adviser, as they have studied on a CeMAP course and are aware of the most cost effective options for a mortgage, ensuring payments are manageable.