Financial decisions you wish you’d made earlier
Over the last few days we asked you to tell us which financial decisions you wish you’d made earlier in life. We had an incredible response with points ranging from saving for a private pension, to opening a savings account earlier, all the way through to getting a credit card and building up a credit file with regular repayments.
In this week’s article we’ve decided to address one of these responses which comes via Twitter user @Letstalkdebt, who said “we wish we had saved more money for a mortgage deposit”.
This is something that we hear often so we thought we’d take a better look as to why it might be a good idea to start saving for a mortgage early.
The ability to save up for a mortgage is an important issue for potential homeowners, especially first-time buyers. The Money charity recently reported that the average first-time buyer deposit is £27,719 and considering that the average household saves 4.9 per cent of their income, they calculated that someone with an average salary of £23,412 would take 22 years to reach that target.
As if to add to the difficulty, new rules released in April this year mean homebuyers will also face stricter checks before being granted a mortgage.
If you just want to find out how much you would be able to borrow based on your annual income alone, (as this is what lenders would be checking) Which? offers a basic calculator that can be found here. As this quiz only assesses the potential amount using your annual income, it is by no means accurate to the deals that you would expect when going to a mortgage lender, but it will give you a better idea of what to expect.
If it’s the mortgage repayment amounts that interest you more, the BBC have this great tool that lets you calculate roughly how much you’d be paying back on your mortgage. Again, it’s only a guide, but we appreciate that it’s often good to have a little more of an idea on what to expect.
That’s it for this week, we hope this bite size serves you well. We’ll be back in a fortnight addressing other financial decisions you wish you’d made earlier.
The Noddle Team