Taking out your first mortgage is a significant stepping stone in life. After the process of meeting with the banks, filling out forms, going through all the credit checks, having all the surveys done and finally getting accepted the signing (of your life away) on the last page of the mortgage agreement is a surreal experience, and once over it’s time to sit back and think “I’ve finally grown up”.

There was a time, when property prices were at realistic levels, that monthly mortgage repayments were around the same as monthly rental charges however things are now much different. With many banks and building societies offering cheap buy to let mortgages, many individuals of the older generation have benefitted from these and bought first time buyer homes.  Consequently, this has seen the prices soar to a level whereby many potential first time buyers can’t get a foot on the property market and for those first time buyers that have managed it most are faced with huge mortgages where the monthly payment is significantly higher renting a property.

Prior to having a mortgage you may have had a reasonable amount of disposable income and money wasn’t an issue. There may have been times where you could buy gizmos and gadgets on a whim, or if you fancied a meal out you simply booked the table and went to the restaurant. Since it is probable your monthly mortgage payment, and all the associate costs such as mortgage protection insurance, life insurance, loss of earnings insurance, critical illness insurance etc. etc., will be significantly more than what you are used to paying in rent it is important to budget for this.

With a high mortgage payment you are likely to find a noticeable decrease in your disposable income. Before the mortgage you may have simply dipped in to your bank whenever you pleased, however it is more than likely that this is no longer possible. Before making a purchase you are likely to find yourself asking certain questions such as “Do I really need this?”, “Will I actually use this?”, “Are there any cheaper alternatives?” and “Do I really need the top of the range model”?” and the like. You will find yourself questioning virtually every large purchase and ensuring you actually have the funds available. Having the self control not to buy, buy, buy is difficult to adapt to at first, however you will probably find yourself getting to the point whereby you decide not to purchase products even though you have the funds available, which is not such a bad thing.

Adapting to a new mortgage repayment is likely to impact on all your spending habits and it is often necessary to look at all costs and reduce them accordingly. You may find that rather than buying lunch you will take a packed lunch from home. You may find that rather than eating out or getting a takeaway you will cook to save a few pounds. At the supermarket you may find you are likely to purchase cheaper brands over the premium brands in a bid to save a few pounds, or you may find you are likely to eat seasonal vegetables since these are often cheaper. These are just a few examples and finding ways to save money and get value for money will become a daily habit.

It is essential that you meet your monthly mortgage repayments since going in to mortgage arrears is bad news as it is likely to affect your credit rating, hence making it more difficult to get credit in the future or more favorable rates when your current mortgage deal is due for renewal. If the worst comes to the worst you may face the bank calling in the mortgage and them repossessing your property to be sold off to settle the debt. These are scary consequences therefore it is important to ensure you have the cash to pay your mortgage repayment every month without fail.

Taking out a mortgage is a life changing experience and it is important to adapt accordingly. The most noticeable thing is the lack of disposable income, meaning you may no longer have the funds to buy all the clothes, shoes, gizmos and gadgets you once could. Taking on a mortgage does, however, teach you to be more savvy with your cash and seek to live leaner and more efficiently, which is not such a bad thing.