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Affordability
Buying house is an exciting time but it isn't a cheap exercise. Before you start looking for your dream home, it's important to work out what you can afford to buy and the costs associated with moving.
Here's what you will need to consider:
What's your budget?
The maximum house price you can afford will be a combination of the amount you can borrow on a loan and the amount of finance you can raise yourself.
Assets
Firstly look at your assets. If you already own a property, you may have equity (the amount you sell your property for compared with the amount still outstanding on your original mortgage that you can put towards your next property). If you have shares or investments, talk to an independent financial advisor about the options of cashing them in.
Liabilities
This is money you owe. If you already own a property, it's likely you still owe a balance on the mortgage. This will need to be settled, or, in the case of some types of mortgage, can be transferred to the new property. Look at what existing debts you have such as credit cards and loans as these put extra strains on your monthly outgoings and will affect how much you can afford to pay back on a mortgage. Finally and most importantly, take into account all the costs associated with moving house. All these fees will have to paid upfront before you move.
Here's what you will need to consider:
What's your budget?
The maximum house price you can afford will be a combination of the amount you can borrow on a loan and the amount of finance you can raise yourself.
Assets
Firstly look at your assets. If you already own a property, you may have equity (the amount you sell your property for compared with the amount still outstanding on your original mortgage that you can put towards your next property). If you have shares or investments, talk to an independent financial advisor about the options of cashing them in.
Liabilities
This is money you owe. If you already own a property, it's likely you still owe a balance on the mortgage. This will need to be settled, or, in the case of some types of mortgage, can be transferred to the new property. Look at what existing debts you have such as credit cards and loans as these put extra strains on your monthly outgoings and will affect how much you can afford to pay back on a mortgage. Finally and most importantly, take into account all the costs associated with moving house. All these fees will have to paid upfront before you move.
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