What costs are involved in buying a house?
Before you can figure out your budget, you need to be aware of the costs involved in buying a house. The basic costs you need to consider are:
- Your deposit
- Mortgage payments and fees
- Solicitor fees
- Stamp duty
- Insurance
- Surveyor’s fees
- Legal costs
How to budget for buying a new house
Once you have a good idea of your expenses you can set some saving goals. For example, if you need to save £5,000 within a year you will need to put aside £417 each month.
However, saving large amounts of money like this every month can prove challenging, as it could impact on your other living costs. The best way to save is to reduce your expenses over a longer period. This can include things like:
- Put together a budget planner to keep record of your spending habits
- Looking for cheaper ways to travel to and from work
- Find ways to cut down on your energy bill costs
- Cutting down the amount spent on meals out and takeaways
- Selling any unwanted items that are not longer used
- Consolidating any existing debts into a single manageable monthly payment
Good budgeting and paying off your debts can improve your chances of boosting your credit score, which could improve the mortgage deals available to you.
Look for financial support
There are other ways you may be able to raise the money needed for buying a new home. You may be able to borrow money from family members or close friends or look at some of the first-time buyer schemes provided by the government. These schemes include:
- Help to Buy: This scheme only requires you to have 5% of the price of the property and over a fixed period you repay the equity loan, which can be up to 40% of the property value.
- Shared Ownership: Similarly, you only need a 5% deposit, and you can own up to 75% of the property’s value as part of the scheme.
- Mortgage Guarantee: First-time buyers can purchase a property worth a maximum of £600,000 with a 5% deposit and apply for a 95% loan to value mortgage.
If you are able to borrow money from a family member of close friend, it is important to make a written record so both parties are aware of how much money has been borrowed and how it will be repaid.
Are you looking to buy your first home?
Proper Local have helped countless first-time buyers to find the perfect home at a price they can afford. We specialise in properties for sale in Canary Wharf and surrounding E14 neighbourhoods, and our expert team are available to help your search today. You can reach us on 0203 282 3733, or by emailing This email address is being protected from spambots. You need JavaScript enabled to view it..
