Buying a home is a huge financial transaction that can be very challenging for first-time buyers. Due to inexperience, first-time buyers may find it difficult to estimate the cost of a property.
As per Zoopla ZED-index, the current average value of houses in the UK market is nearly £649,000.
The total cost of buying depends on various factors, such as the price of the property, the fees you pay, and the mortgage you get. These additional costs can add more than 5-10% to the total bill.
Here are the ways that you can follow to estimate the cost of a house, and you can minimize it:
1- Check Your Financial Health
Understanding your financial health is crucial to create a budget for buying a property.
Take into consideration all the current finance savings, investments, loans, and expenses. Reviewing your spending and credit check also gives you a good idea about your financial status. It enables you to know how much finance you have in hand, how much you need to arrange, and how much you can lend.
2- Select the Type of House
Decide the type of house and location that you want. There is a wide range of property options available in the UK market.
Here are a few types:
- Flat or apartment
- Terraced houses
- Detached houses
- Semi-detached houses
Moreover, decide the location and prices. Some of the best locations in the UK to buy a property are Knightsbridge, Belgravia, Southbank, Battersea, Camden, Islington, Barnet, Hammersmith, Fulham, Wembley, and Richmond.
It helps you to narrow down the options and only take a tour of those units that match your requisites and budget.
3- Hire a Conveyancer
Buying a property in the UK is time-consuming and involves a lot of legal work. Also, without a conveyancer, you may end up paying more while buying a house.
Conveyancers provide expert buying advice and handle all the legal work, such as drawing up contracts and dealing with the money side of the purchase.
Hiring a conveyancer allows you to make the correct decision and avoid any legal issues in the future. If you are a first-time buyer, ensure to associate with conveyancing firms or professionals who are certified by the Regulatory Authority or Council for Licensed Conveyancers or the Law Society.
4- Decide Your Mortgage Deposit
The first amount that you pay when you decide to buy a property in the UK is a certain percentage of the home’s total cost.
Most of the mortgage providers want you to deposit a minimum of 5% of the total cost of the house while they pay for the rest of the amount.
For example, a 5% deposit on a £200,000 home would be £10,000. Your mortgage would cover the remaining £190,000, which is 95% of the total price. In this case, the mortgage’s loan to value (LTV) would be 95%.
It implies that the more you deposit, the better. It lowers your LTV, which in turn reduces the interest rates and fees.
While it is good to be flexible enough and have an open mindset when you buy your home for the first time. It is also important to have a list of things you want mandatorily. It enables you to have that purchase that fits your needs as well as your budget. Write all your basic desires and start scanning the real estate properties accordingly.
As a first-time buyer, you are likely to make some errors and incorrect decisions. Therefore, you must follow the above tips and do comprehensive research to reduce the chances of committing errors. One of the best ways is to hire a professional and expert conveyancing specialist for complete assistance throughout the buying process.