Common Mortgage Mistakes..... 3 Solutions

The most common mortgage mistake is over extending yourself. In other words borrowing right to the limit with no slack for a downturn in your fortunes. But what can go wrong you say? Well plenty, actually . If you're dependent on 2 salaries. One partner could lose their job or your wife could get pregnant.The overtime you were depending on could be cut back. If you're mortgaged to the hilt it's a worry even if you have some insurance. Try and keep your mortgage repayments within reasonable limits so there is still money for emergencies.

One solution which is not for everyone but which works well for lots of people is to take in lodgers or flatmates to help pay the mortgage. If you have one or two extra people contributing rent every week it makes a huge difference. Just don't forget the the tax man and be selective in your choice of tenants. Remember this doesn't have to be for ever but it sure helps over the short term. Even if you sacrifice a bit of privacy you could make up for it with new friends and lots of fun. It depend on you.

Second solution which requires a little more patience and requires you to save a bigger deposit. 20% or more is ideal, the more you can put down will often get you much more favourable mortgage terms. You can get lower or no deposit mortgages but you should think about these carefully. A few years back my sister in law and her husband took out a low deposit loan just before property values droppped and interest rates went higher. Suddenly they found that their house was worth less than the mortgage so that they couldn't sell without losing money. Not only that the repayments had ballooned out so that she had to work 2 extra part time jobs just to meet the mortgage repayments. Hopefully that kind of situation has passed into history but plan for all eventualities.

Third solution isn't really a solution but part of pre-planning when you apply for your mortgage. That is : Make sure you choose the right type of mortgage to suit your situation. Your mortgage manager can help you here. He wants your loan to be trouble free just as you do so be up front with your finances and budget and discuss all the various options with him. Time and careful planning here could save hours of worry and trouble later on. Often there are special features to help at the start of a mortgage or features to break the loan up into different repayment options. Whatever they are choose the one best suited to your circumstances.

But hey it's not all doom and gloom out there. Property ownership has made more wealth for more people than anything else. And borrowing other people's money leverages that money much much more to make even more wealth. So get started as soon as you can, you won't regret it. Just be sensible, budget, preplan and keep it all within your control.

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