Probably the biggest expense we have each month is our rent or mortgage. Of course, once the arrangement is in place there is little we can do to reduce the amount, but there are a number of ways that we can avoid the hidden extras:
- Building insurance is compulsory with a mortgage and should be covered by your landlord/lady or housing association if you're renting. If for some reason your property is damaged by, for example, a broken pipe you may be able to claim under this policy, but, as with any insurance, look out for the amount that you will have to pay anyway to make a claim. Does it make it worth it?
- You may not have thought about contents insurance but it is worth considering if you can afford it or, more to the point, can't afford not to have it.
You can obviously make your home more secure by taking a number of fairly cheap measures such as:
- Fitting window locks.
- Fitting a timer plug for when you're away or out to switch on a light and radio for example.
- Joining a neighbourhood watch scheme (free) or even setting one up in your area.
- Having a checklist by the front door. For example, Have I closed all windows? Have I locked the back door?
If you're renting there are a number of hidden extras that can emerge. When you receive a contract to sign check for the following points so that you know exactly what you are getting for your money. Does the monthly rent include:
- Water bills?
- Council tax?
- Necessary repairs to the property?
Other things to ask about are:
- Will the landlord/lady reimburse you if you decide to paint a couple of rooms?
- What were the previous tenants' average heating bills?
- How much notice do you need to give before you can move out WITHOUT losing any money?
Further points to consider:
- A potential problem can be getting your deposit returned when you leave. Make sure you know exactly what the requirements are, in writing, before you hand over your money. Make sure that you get a receipt for your deposit or ask your landlord/lady to record this and all your rent payments in a rent book, which YOU keep.
- Try to check around for noisy neighbours before you move in and if you've got children check out the safety of the local play area. If it's a block of flats with a shared garden can you see your children from the window?
Mortgages are far too complicated to discuss in a short booklet. Shop around and take a lot of advice before you decide which type of mortgage is most suitable for you.
- You will probably be stretched if your house costs more than three times your gross annual income.
- Your mortgage/rent should not exceed 35% of your monthly income.