It is crucial to know how much you can afford to spend when you are buying. Add together the amount you can borrow, any capital you expect to realize from the sale of your present property, any cash savings you may have or any money which may be contributed, from parents or the like. This will give you the absolute maximum you can spend.
Also remember to take into account all the costs involved:
- Survey fees – Most lenders will accept the Home Report valuation and survey, in which case you should have no cost for this. If your lender will not accept the Home Report, or if the valuation is more than 3 months old, you may incur a cost for a valuation report.
- Legal costs – These will include not only legal fees but items such as stamp duty and Land Registry fees. We can supply an itemised estimate of these.
- Removal fees
Then be realistic about the money you can afford to pay out each month. Bear in mind that the total amount a lender may lend to you may result in monthly payments which are higher than you would comfortably like to be committed to. The new house may cost more to run in terms of gas, electricity and so on. Is the council tax higher than you are used to? Will you need to spend money on renovating, decorating and so on?
Draw up a budget based on all these factors and you can proceed safely.
- How much can you borrow?
- How much cash of your own do you have?
- Legal Fees and expenses
- Moving costs
- Mortgage payments
- Insurance payments
- Council tax
- Gas / Electricity / Telephone
- Travel costs