Buying a house can be one of the most stressful times in many people’s lives, from finding the perfect home to managing finances. And with June 2021 being the busiest month on record for the number of homes sold in the UK, more and more new homeowners are choosing to make the move.
One of the first things to think about is how to work out a budget. Buying a house can be a minefield in terms of costs but this guide will help you plan and budget your finances accordingly.
Consider what you can borrow
It’s worth speaking to a mortgage advisor before you begin your search. This will give you an idea of the amount you can borrow as well as what monthly payments you can afford. Existing debts and loans will be taken into consideration too, so it’s a good idea to consider your finances carefully before applying to borrow for a house.
A lender will want to check your credit score to ensure you’re a safe option for borrowing. Someone who has consistently paid off finances in the past, such as credit cards, will usually have a better credit rating than someone who has no borrowing history. It’s worth having a look to see if you can increase your credit score before thinking about a mortgage.
Save in advance
With UK house prices accelerating, it’s more important than ever to think about saving before buying a house. Building up your savings and planning ahead will stand you in good stead for supporting all the extras that go along with house-buying. For example, will you need to furnish your new house or do some urgent renovations?
Consider your monthly budget and think about where you may be able to make some cutbacks along the way to mitigate any of these easily overlooked costs.
Consider the additional fees
It’s estimated that the cost of moving home in 2021 is over £8000. This involves costs such as legal fees and removals. With that in mind, it’s worth including this in your budget from the start to ensure there are no shocks along the way.
With stamp duty due to come to an end in October, many people are attempting to make their move before then. The threshold will reduce to £125,000, meaning more people will have extra costs to pay.
Whenever you’re planning to make the move, follow these tips and you’ll soon be on your way to buying your perfect house.