When it comes to finding the right property for you, you need to be realistic about what you can afford. Otherwise, you could end up wasting a lot of time viewing properties that aren’t suitable for your budget.
In addition to our array of articles containing helpful moving house tips[1], check out our top advice on how to find a house within your budget:
Make an appointment with a mortgage adviser
Trying to navigate the world of mortgages can be difficult on your own, which is why it can make sense to turn to a mortgage adviser or a New Homes Mortgage Adviser (NHMA) if you’re hoping to buy a new build. You can do this straight away; you don’t need to wait until you’ve found a property.
A mortgage adviser will be able to discuss your options, access your financial information, look at your individual circumstances and perform affordability checks. Some advisers are fee free, while they’ll all be able to tell you how much you’ll be able to potentially borrow from a mortgage provider and independently search the market to find you the best mortgage deals. Once you’ve chosen the deal you want, they’ll go through the application process for you and you’ll get a decision in principle. You can then show this to estate agents or developers as evidence that you’re a serious buyer.
Don’t overstretch yourself
Your decision in principle states how much you can borrow. If you attempt to borrow more, your chances of getting a mortgage approved will be slim so you may need to put your moving plans on hold and save up a large deposit first.
You must be honest in your mortgage application and interviews. If you’re planning on switching jobs you should wait until after you own the new property, or this could cause problems. If you have plans to start a family or give up work, this needs to be discussed. Paying for childcare, for instance, may reduce your income substantially so can affect how much you’ll be able to borrow.
You must be able to afford your mortgage payments every month without fail, in both the short and long term. You’ll want to be able to enjoy life too, from shopping trips to holidays, nights out to treats. Living frugally until you save up for a deposit is common place, but doing so once you live in your new home is far from ideal.
This is where new build homes come into their own, because an older home might require lots of work doing to it. A newer home, for instance, while it’ll be a blank canvas, won’t require extensive repairs. The costs incurred will be decorating and interior design related, rather than structural, and will ensure you’re living in a house that feels like a home.
Search smart
Often, you can set a minimum and maximum price when searching and can register for alerts. It can be tempting to browse properties that are over your budget but this can be a bad habit to get into.
If you can’t afford the kind of property you want now, perhaps you next home will be a stepping stone and after a few years you could sell it at a profit and then buy your ideal home?
Cut out the middle man
If you have to sell your current home in order to buy your new home, you could end up having to pay thousands of pounds to your estate agent. However, if you’re interested in buying a new build, your developer may offer a part exchange scheme which would mean that you wouldn’t have to pay any estate agent fees and you’d receive a fair price for your property. This could save you a lot of money, stress and effort.
Another avenue you may want to explore, is online estate agents which charge a fixed price of between £300 and £1,500 rather than taking a commission based on how much your property sells for. This could mean that your budget could go up slightly as you’d have a bigger deposit, depending on how much profit you make from your house sale. Alternatively, you could use this extra cash to pay your legal or removal fees.
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