There’s no better feeling than finally being able to relax in the home of your dreams. But, with plenty of things to think about before securing the purchase, it can often feel miles away from reality. You’ll no doubt be focused on finding the perfect space for you and your family, however, there are other important things you should be thinking about too: having your finances in order will be what ultimately secures you the purchase, after all.
Here, we will talk you through four tips, including how to find the perfect home, saving up for a deposit, and applying for a mortgage, to ensure you’re able to make your dream home a reality in 2019.
Save for a deposit
While it’s only natural to want to get stuck in with your house search straight away, it’s necessary to know what you can afford prior to this. So, we recommend setting a budget before you begin saving for a deposit, so you know what is realistic for you.
Typically, you will need to save a deposit of at least 5% of the property’s value to secure a mortgage. To find your dream home, look at house prices in the areas you like and create a shortlist of homes you can see yourself living in. This will help you to determine how much your dream home might cost, so you can begin saving for a deposit accordingly.
We know that saving can be difficult, but it doesn’t have to be this way. Making small changes such as cooking from home more often and setting yourself a weekly budget can make a huge difference. We also recommend downsizing your belongings by selling any unwanted goods — online marketplaces such as eBay, Gumtree and Craigslist are great for getting rid of almost anything in your home in exchange for cash.
Find the perfect home
Before you begin bookmarking all the homes you think look great, it’s important that you consider each property logically. Everybody’s preferences and requirements are different, but some universal things to think about are:
Size: Is it big enough for your family and all of your belongings, and will it accommodate any future additions to your family or guests?
Location: Does it have all the local amenities you and your family will need? Nearby supermarkets, doctors and schools, as well as good transport links may be some things to prioritise.
Affordability: You’ll need to set a budget in advance of your house search and ensure you stick to it. This will make sure you can comfortably afford your new home and be able to make any changes you’d like to it without breaking the bank. You’ll also need to think about what the running costs of the property are likely to be. This can be calculated by looking at the council tax band, as well as asking about the approximate estimates for utilities and insurance.
Remodelling/renovation: Will the house you choose need to be remodelled or renovated and how much do you think this will cost you? You can find professional and realistic estimates for things such as new kitchens, bathrooms, and extensions on sites like Home Renovation Estimate.
Plan ahead for extra costs
Most people will need to meet with a mortgage broker to discuss applying for a mortgage. But, be aware that these come with costs such as a booking fee, valuation fee, and an arrangement fee. However, paying these will ensure you are getting the best help and advice for your financial situation.
Once you’ve found the right home and have had your offer accepted, you should make sure you get a surveyor to come and inspect it. These professionals will check to see whether there is any inherent damage to the structure of your home, or if there is anything that could end up costing you down the line. This is important to do before an exchange of contracts when you will be penalised for pulling out of the deal.
You will also need to find a reliable and trustworthy moving service that will be on time and take care of your valuable items during the move. This could include looking for companies that will pack your things for you, as well as those who offer the best and most realistic quote for you. For more information on the hidden costs that moving can bring, we recommend you read our guide to moving costs, so you can ensure you’re planning for these expenses as well.
Apply for a mortgage
Next, you’ll need to apply for a mortgage: a legal agreement made between you and a lender in which you are loaned money secured against a property. You pay interest on the repayments back to the lender and once you’ve paid the full amount back, you may own the property outright — but this depends on the type of mortgage you take out.
You can choose between repayment and interest-only mortgages. The former means you pay off the interest and the capital borrowed every month, whereas interest-only requires you to pay off the interest (with a separate plan to pay off the original loan at the end of the mortgage).
There is no golden rule as to how much you’ll be lent, but you should be aware that this can depend on a number of factors such as your credit score and the combined salaries of the applicants — for an approximate estimate, you can use a tool like this mortgage affordability calculator from The Mortgage Genie. After inputting your total household income, you will quickly receive an estimate for how much you may be able to borrow, allowing you to plan ahead — just be aware that this is to be used as a guide only, rather than strict recommendation or advice.
We believe that finding your perfect home shouldn’t have to be a dream. And, hopefully these top four tips will guide you through the process and help you to reach your property goals in 2019. Good luck!