Buying your first home is an exciting prospect. Whether you’re desperate to ditch the irritations which come with flatmates, fed up with landlords, or you just want a place to call your own, there are plenty of things to look forward to when purchasing your first house.
However, it can feel nerve-racking, particularly when you see the monumental checklist of things to do and paperwork to complete when making such a life-changing purchase.
Budgeting is one of the most important steps to take when you begin thinking about purchasing a house. From working out how much you can afford to spend and setting a budget, to taking steps to save money and getting pre-approved for a mortgage, there are plenty of things to consider when budgeting to buy your first home. Let’s explore what you need to know.
Set a budget
The first step to buying your new home is to determine how much you can afford to spend. You’ll need to consider the amount you can save for a deposit, as well as how much you will be able to put towards your monthly mortgage repayments.
Remember to consider the additional payments which come with buying property when planning your budget. You’ll need to allow for the cost of stamp duty, insurance, mortgage fees, legal costs, and surveyor fees.
Once you’ve set your budget, the best mortgage books suggest you’ll need to start saving money for a deposit. Consider how much you can realistically set aside each month and create a savings target, to help you determine how much you need to save in total and roughly how long it will take to reach your goal.
Get familiar with financial jargon
Before you look for a house, it would be helpful to see if you can get pre-approved for a mortgage. This will also help you decide what you can afford to spend, which will be handy when planning your budget. Do some research on the different types of mortgages available and how each of the options work.
Make sure you understand all the banking jargon used on the paperwork, as this will help you feel more confident about making decisions. It’s natural to feel overwhelmed when you begin the process of buying your first home. However, there is plenty of help available to guide you through your journey of becoming a homeowner.