In this article, we take a look at how much you can realistically afford when buying a house on your own.
We had a look at 13 of the biggest lenders and discovered that they will lend between 3.
75 and 5 times your annual income.
So, on a salary of £20,000, you can borrow between £75,000 and £100,000.
For that money, you will struggle to find a decent size flat in most parts of the country.
On top of that, the recent dip in the economy has made banks want to offer much less.
Even so, is it a good idea to borrow the maximum amount you can afford? It is easy to become fixated on the cost of a property and not consider the other costs that any buyer will incur.
For example, if you save a £21,000 deposit and buy a £121,000 house then you will need to pay stamp duty of £1,210.
For any house, you need to consider the cost of legal fees; informing the land registry; getting a valuation for your mortgage; having a survey done; getting buildings insurance and hiring a removal firm on the day you move.
All of that can add an extra £4,000 to the cost of buying a house.
Then if that doesn't put you off, think about the cost of furnishings, council tax, heating and electricity bills that you might not be used to paying.
But wait, it's not all doom and gloom, if you save a large deposit and take your time, there is a lot less danger of something going wrong.
Banks and building societies have recently made it near impossible to get a 100% mortgage and quite difficult to get a 95% mortgage - this is to reduce the risk that they take on.
What this means for a first time buyer is that it is even more important to save for a hefty deposit (preferably 25% of a property's value for the best deals).
In conclusion, we live in a society where we can get what we want, when we want it.
When buying a house, just do a bit more planning and be patient, it's only the biggest purchase of your life!