If you’re a potential first-time buyer looking for a mortgage, then you probably follow the property news fairly avidly.

It seems there are always headlines shrieking about a property boom, an imminent bust, rising interest rates and fluctuating markets. In some cases, it can be difficult to know what is fact and what is sensation.

Well, one thing which is most definitely fact is that the way you are offered a mortgage has now changed under new mortgage regulations. As reckless borrowing and irresponsible lending are widely blamed for the globally devastating economic crisis, it is essential that lenders never again leave themselves vulnerable to a black hole of bad debt. Equally essential is that borrowers are not awarded larger loan amounts than they can realistically afford to pay back.

With this in mind, the new regulations will look at much more than just your current salary. Creditors will need to take into account what your actual disposable income is, so prepare to lay yourself financially bare at your mortgage meeting. You will be expected to declare any specific outgoings, such as car payments or existing loans, and highlight your spending habits on essentials such as food and fuel and more luxury items such as holidays and socialising.

This isn’t just your bank being nosey. They need to assess how much money you actually have left and whether this will be enough to cover the mortgage you are asking to take out. They will also look at your likely repayments if interest rates rise. They will asses various permutations to calculate what you will be paying in this eventuality.

You will no longer be able to perform a self-certification for your mortgage, where you just declare yourself able to make the repayments. As well as your current circumstances, you will be asked to reflect on your future plans. Are you likely to remain employed? Are there any anticipated changes to your working hours? Are you planning to start a family any time soon?

While some of these questions might feel intrusive, it is in your interests to answer them as honestly as you can. Taking on a mortgage which you can’t afford to pay is a massive stress and you could lose your home as a result. Be realistic about the type of property you can afford to buy right now and save yourself from the financial headache of payments you can’t afford to meet.

If you would like more information about financing a new home, come and speak to Keywest. We work with trusted independent financial advisors and mortgage brokers to offer our clients the best possible advice when buying a house.