by Mark Johnston
Buying a home is a huge financial commitment and it becomes a more daunting task if it is the first home that one is buying.
Once anyone has decided on buying a property it is time to start to think about how much they can afford. On top of the cost of a property there are many other one off expenses involved in buying and also moving. These can easily soon amount to between £2,000 and £5,000.
Karen Barrett, chief executive of unbiased.co.uk said “buying a home is a huge financial commitment and it is crucial for consumers to factor in all the additional costs”.
When working out a budget to buy a property many people do not factor in costs such as stamp duty, mortgage fees and solicitors fees.
According to a new report many first time buyers are not taking in to account fees and extra costs associated with buying a home, nearly a quarter have no idea how many extras there are and a small percentage do not even realise there are any additional costs at all.
Financial adviser website unbiased.co.uk found that almost one in ten first time buyers believe that extra costs only add up to around £1,000, but in many cases this amount can be the cost of conveyance alone.
Data has shown that a lot of first time buyers, especially first timers, go over budget on the purchase of their home simply because they have not factored in any other costs.
In order to get a good idea of what sort of homes potential buyers can realistically afford to buy it is essential that all cost are added in to the budget.
House buyers should consider that may be “how much can I afford?” is not the right question, a more appropriate question should be “how much should I spend?”
Buyers should carefully consider how much they can realistically afford to borrow, most lenders may offer up to 3 times a borrowers salary, some may even lend more but at a higher rate.
A thought worth considering is even though a mortgage lender may tell a borrower that they can afford a £250,000 home it does not mean that they should buy a property at the very top of their price range.
While lenders will happily work out what they think a borrower can afford, the borrower needs to be comfortable too, they should make sure they will be able to deal with unexpected extra costs.
Buying a home in a lower price range can therefore mean that mortgage payments will be more reasonable and the total can be paid off sooner.
Research has shown that that one of the biggest costs potential buyers incur, especially first time buyers who have previously being living with parents, is the actual cost of moving in such as furniture, redecorating, household appliances, insurance and of course the general running costs of a home.
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