How To Prepare Financially Before Buying A House In The UK

Buying a new home is exciting for any first-time buyer. To get you on the right path towards buying the home you’ve always dreamed of, it’s a great idea to get your finances in order first, even before meeting with a mortgage advisor or attending your first house viewing! Save yourself unnecessary stress by planning in advance and you’ll be strolling into the next stage of your life with no sweat feeling fully prepared.

Know Your Budget

Whether or not you’re looking to set your roots down in Central London or the surrounding areas, start by doing a bit of window shopping and jot down the prices of any homes you’d love to view. Being realistic when it comes to house hunting is always the best approach. If the price tag is slightly higher than your budget, expect to pay a hefty deposit as well.

Once you have a dozen or so properties on your list, average out the prices of these homes and then you can work out how much deposit you’ll be needing to save. Ideally, you’ll have at least 10-20% of the price of the property to be accepted by most mortgage providers, unless you opt for the Help to Buy scheme of course.

Help To Buy

If you’re looking to pay as little as 5% for your deposit – the government’s Help To Buy Scheme is a great option. Take advantage of the Help To Buy Equity Loan, where the government lends up to 20% of the price of a new home outside of London. Homebuyers in Greater and Central London, however, can get up to 40% and borrow the rest from a chosen mortgage provider. You can also opt for Shared Ownership properties, where you buy a share of a home and then pay rent on the rest.

Unfortunately, you can no longer apply for a Help to Buy ISA, as the closing date for applications took place on 30th November 2019.

Plan Ahead on Fees

There are a few expenses that can catch you off guard when investing in a home. From legal fees to moving fees and not forgetting that pesky Stamp Duty. It’s always a smart idea to use an Estate Agency who can give you impartial advice on any fees you may incur. Estate agents in Central London, Hudsons Property, help their clients every day by offering honest advice on the financial aspects of buying a house. Estate Agencies are an effortless way of taking the hassle out of home buying.

Need to start saving? There are some often-overlooked, nifty ways that can help you do just that. Try a money-saving app such as Oval. This innovative app can move money into your savings account based on your habits. Unexpected coffee break? £2 is placed into your chosen account. Helping you break costly habits whilst saving for the future. Another good way of saving money is by cutting off any forgotten direct debits. Don’t worry, you’re not the only one – Britons waste a staggering £14bn on unused direct debits every year. It might be time to say goodbye to that unused gym membership or that costly app you never use!

Once you’ve put a financial plan into action, your desired home will be in sight before you know it. An organised home buyer leads to a happy homeowner. Good luck!