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  • Step 1a - Find a Property: Budget

    3rd October 2017

     

    Establishing the budget when buying a home comes first as it saves you a lot of time later! This stage is about knowing exactly what you can afford to buy before investing time in finding a property.

     

    The easiest mistake to make as a first-time buyer is to get carried away and look at how much money you have in savings and thinking about what you could buy if that made up a 5 – 10% deposit towards a mortgage. Then you go on viewings and get your heart set on a property, make an offer and then find out you can’t get the mortgage you thought you could.

     

    1. Work out how much money you have available now (in cash and savings)

    2. Subtract your pre-purchase costs (mortgage application, building survey, insurance and removals) to establish your maximum mortgage deposit. You can also subtract post-purchase costs (conveyancing, stamp duty, maintenance and repairs) at this stage if you want to reduce your mortgage size and if you have enough savings available.

    3. Use this deposit to find out what size mortgage you can get via a mortgage broker

    4. Add any other money available later such as funds from selling your current property

    5. Subtract post-purchase costs (conveyancing, stamp duty, maintenance and repairs) you will need to cover later in the process (if you didn’t subtract them earlier)

    6. This leaves you with your maximum budget for buying a house

     

    We suggest you get your mortgage in principle before searching. There is a lot of debate around how useful they are – but it does at least signify to the seller you are a serious buyer and ready to move. This puts you in a stronger position than a similar buyer without a mortgage in principle who has made the same level of offer.

    Now you know what you can afford to buy, you can start the Property Search

     

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