Buying a new home is a huge decision. Not just in terms of the life you’re going to lead but in terms of your finances as well. It’s more than just a big cost you have to save up for. It’s a whole series of different moving costs that are going to have far-reaching financial implications. So, what are the costs of the home, what’s obvious, what’s hidden, and what can you do about them? Hopefully, the points below are going to help you form a more complete budget that’s free of any unwelcome surprises.
The deposit
When you’re preparing to buy a home, this is where you’re going to be putting all of your spare change for the foreseeable. Making a current household budget can help you save up for the deposit much quicker. But rather than paying off the minimum so you can get the ball rolling as soon as possible, you should consider whether it might be smarter to keep on saving up. The bigger your deposit is, the more favourable the long-term mortgage deal will be. Of course, if you see a home you want to make a move on as soon as possible, that may not be a viable option.
The mortgage
A lot of people don’t look into their mortgage until they’ve spent some time on the market and started to narrow down their choices. However, it might be a smarter move to get the mortgage pre-approved before you actually start looking. It gives you a more reasonable expectation of what you can pay. Read 1st UK Mortgages for more information on the different deals available from different providers, even for those with poor credit. If you can take the time to improve that credit, of course, then you should. Don’t be surprised by some hidden costs from your mortgage providers, either. A lot of them add an arrangement fee, which can be asked for up-front or can be added to the mortgage.
The inspection
When you’ve found the house you want to buy, it might be easy to let your emotions take over and get you jumping in there. That’s never a good thing, unfortunately. Keep your expectations reasonable and make sure it’s as good as it looks. You should always get a home inspection or take a closer look yourself. This way, you can discover any hidden problems like air leaks, mould, damp, roofing problems, utility issues and more. It’s not too often that these issues will cause a seller to drop their price. Some of the more major ones might. Most of the time, they’re going to invest in getting it repaired themselves.
The negotiations
So, if problems in the home aren’t going to get sellers to drop their price? A more realistic and reasonable offer might be the case. Most sellers are going to put their house up for a good deal more than they actually expect it to sell. For that reason, you should never skip the haggling stage no matter how much you like the place.
You should also look up the records of sales for similar houses, and especially houses in that area if you can find them. That way, you can see what homes like that really do sell for. While negotiating, make sure that your estate agent is also keeping up to date on what other offers the house gets. That way, you can haggle competitively while making sure you’re not getting outpaced. At the same time, don’t take a deal that you don’t think is right. You have to be willing to walk away even from a home you love if you can’t get it at a reasonable price.
Getting the ball rolling
Speaking of estate agents, they are going to be another cost worth considering. As will the conveyancing process. These are both essential partners in buying a home. But that doesn’t mean you can’t save money on them. For instance, when it comes to your conveyancer or solicitor, ask about paying at a flat rate instead of monthly. You can also look for solicitors that offer no-fees options to make sure you don’t get costs added on if a sale falls through.
The things you missed
Sometimes, people don’t hire the inspector. As we mentioned, that can be a fatal flaw. But beyond failing to get an inspector, you might actually get failed by the inspector. In those cases, you may be able to get some or all of your money back. But regardless of who is at fault, you should always keep a bit extra aside in the budget for the costs of fixing up parts of the home you didn’t expect to deal with. Long before you move in, use sites like My Builder to find plumbers, electricians, and other tradesmen in the area of the home. Do your research before you need them. Otherwise, your haste to get the plumbing fixed could have you hiring someone who will give you a much worse deal.
Insurance
Home insurance is essential. There’s no getting around it. There’s too much potential for damage to your home or contents to try and go without. However, that doesn’t mean that you can’t save money on your insurance. For one, you can use insurance comparison sites to find who gives the best deals. There are also insurance companies for different demographics of people, whether you’re a first-time homeowner or an older homeowner. It’s worth taking a look at all the clauses involved in the insurance, as well. Many will try to sell you more insurance than you need. Picking out the pieces that you don’t can be a great help in reducing the costs.
Most of the steps above are going to be essential to getting a good deal on a home, and all of them are going to cost you in some way or the other. But by preparing for them, you know how to reduce them and you can at least be sure that they’re all accounted for in the budget.