The real estate sector has been in an interesting place during this two-year pandemic. The industry has certainly been one of the most affected by the Covid-19 health crisis if you recall the first year when most of the world was in lockdown. Sales dipped, plans changed and all viewings stopped as people observed health protocols and stayed at home for the most part.
But now, things are slowly getting back to normal and there’s once again a bullish forecast for the sale of houses and apartments. Some are wondering if commuting to work will still be the norm as working from home proved to be successful for most of the employed. Experts are seeing the rise of the Home Office which will depict what most people are doing these days – designing their residential environment to be Instagrammable for Zoom meetings.
As WFH becomes the trend and employers allow it, people are realizing that a stable, high-speed internet connection is the only thing that matters. What’s also true is that more relaxed rules for working from home – coupled with the rise in freelancing and self-employment – mean that people can now choose to be location-independent and live outside more expensive cities.
Truth to tell, I’ve been toying with the idea of countryside living where the air is fresher and there are vast fields to plant one’s produce. I get sentimental when I think of my childhood in our province where life was much simpler and people were always smiling. One can’t simply get the same vibe in the city where folks are more stressed and jaded dealing with the concrete jungle.
Romantic as living in the countryside may seem, certain things have to be considered for practical purposes before making The Big Move. One’s age, income, credit history and such will definitely be factored in by the bank or the lending institution when applying for a home loan. Gladly, there’s a site like Mortgage Calculator UK to make computing mortgages and interest rates very easy. The advantage of this website is its accuracy, convenience and speed. For example, for a 3% APR loan that runs for 25 years, the website has a built-in algorithm or formula to instantly compute the monthly payments one has to make. You can calculate for fixed-rate or interest rate only loans, then you can freely adjust for future changes in the interest rate.
After all this is done, the next most important thing to ask is : what mortgage payment can you afford? Mortgage Calculator UK has an entirely different section on affordability which will make you assess your mortgage qualification based on your financial situation. Typically, banks will lend 3 to 4.5 times your annual income for your dream home, but they will also analyze your debt-to-income ratio. For example, the site says that if 40% of your income goes to debt repayments, it’s a red flag for lenders but you can still get approved if you have a good credit record. What I really appreciate about this section are its expert tips for improving your credit rating and improving your mortgage eligibility. It’s really worth a read as it puts you on the seat of people who approve/disapprove loan applications.
Based on the above discussion, all the technicality and paperwork of owning a home is no walk in the park. The key to all this patience and proper education. In as much as real estate ownership is a big investment which will affect one’s bottom line for a good number of years, it is important to read up and do serious number-crunching before signing on the dotted line. Study now, relax later.