Essential Guides & Advice The Essential House Buyers Guide

Date Published:

22/05/2008

Working out your budget and how much you have to spend is vital before you start looking at property.

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Step 1: How much can you afford?

A proper calculation of all your incoming cash and outgoings is the first thing you need to do so you know what is left. Mortgage lenders will want to know, too. You will need: Bank statements.
Credit card and other card statements.
Bills and other receipts for ALL your spending.
Wage slips.

Once you have the real-picture budget, you can then look for ways to economise - but they must be realistic.

The "hidden" costs of home owning

Remember there will be other costs which may be new for you eg:
Building insurance (usually a condition of your mortgage).
Council tax (depends on local authority and type of property).
Utility bills such as water, electricity, gas and telecommunications.
TV licence.

Costs of buying

You need cash up front for this which includes: The deposit. Even just a 5% deposit will give you more mortgage options and benefits. If you have not already been saving, do what you can to raise this money.
Valuation fees. Valuation is for the lender; vary hugely depending on how much your mortgage provider adds for "admin fees".
Surveyor fees. If you wish to have a thorough structural survey of the property.
Mortgage fees. Another widely varying "arrangement fee".
Solicitor fees. Often including other costs such as land registry fees and local authority searches.
Stamp duty. This is payable on properties over £123,000, starting at 1%, rising to 4%.
Moving costs.

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