Buying a house is arguably the biggest financial commitment you are likely to make in your life. Whether you are buying your first home, moving on to bigger and better things or even downsizing, navigating your way through all the various steps involved can sometimes be quite a rigmarole.
If you are selling a property and moving on to a new home, then you will need to renegotiate the terms of your mortgage either with your current lender or with a new provider. An online mortgage calculator will help you determine how much you can borrow but don’t forget to take into account all the other fees you are likely to incur.
Deposit and Mortgages
If you are first-time buyer you will need to have a substantial deposit. Expect to need up to 20% of the asking price, as 100 per cent mortgages are practically impossible to come by these days. If you are already a home owner but want to move on, then you might be able to use the equity in your current home as a deposit. If you do not have sufficient equity, you will also need to raise a deposit.
Bear in mind that the bigger the deposit or equity you have, the better the mortgage interest rate you are likely to get. You will see this clearly demonstrated when you use an online mortgage calculator. Provide a few details, including the amount of your deposit or equity and a mortgage calculator will indicate how much you can borrow and provide an idea of likely monthly payments.
Other Fees
The other expenses you will incur when buying a property include legal fees, stamp duty, the cost of a survey and removal fees.
A Homebuyers Report (HBR) or other survey could be invaluable. Your mortgage provider will require that at least a basic survey is undertaken before lending you any money. It may be worth your while investing in a fuller survey such as a HBR or full structural survey to ensure that the property is worth the money that the vendors are asking for it.
Surveys can be pricey but can also save you thousands in the long run. If the survey reveals that the property requires significant work, you may be able to renegotiate the asking price or you may in fact decide not to buy at all. Some say that you shouldn’t allow your furniture or other possessions to be too much of a factor when deciding on a new home. However, unless you have allowed plenty of money to replace them, you should perhaps think about if and how they will fit in.
Don’t forget to allow for the cost of moving. Depending on how much furniture you own and how far you are going, you will either need to hire a van for a day or two or employ a reputable removals company. You might even need to think about the cost of storage if your sale does not coincide with your purchase. This is quite common and can even be an advantage as being chain free improves your bargaining position.
Buying a new home can be both daunting and exciting. There are good deals around at the moment so start by entering your figures into a mortgage calculator and see what you kind of property you could afford to buy.
