Can you afford to buy your new home?
The amount of money you can spend on buying your new home will depend on how much money you have saved and how much a bank or building society will lend you. When deciding how much of a mortgage they are willing to offer you the lender will take into consideration.
- the amount of deposit you can put down
- your salary
- your regular outgoings
Lender's attitudes vary, but if you're applying for a mortgage on your own they will usually lend you between 3 and 3.25 times your annual income before tax. If you're applying with somebody else, they will usually lend either between 3 and 3.25 times the main income plus the second income or 2.5 times the two incomes added together.
You'll also need to factor in additional costs such as
- solicitor fees
- stamp duty
- surveyor's fee
- land registry fee
- packing and removal costs
Here is a checklist which includes some approximate costs. Many of the figures, for example the surveyor's fees, will depend on the size of the property and its' location.
Cost of buying a Home:
| Arranging the mortgage | From £200 up to £1,000 |
| Legal Fees | From £400 selling and £500 Buying |
| Land Registry Fee | £220 |
| Other Searches | From £70 |
Local Authority Search Fee:
| England and Wales | Average £140 |
Stamp Duty:
| Residential property | Rate of Stamp Study Land tax |
| Up to £125,000 | 0% |
| £125,001 - £250,000 | 1% |
| £250,001 - £500,000 | 3% |
| £500,001 or more | 4% |
Survey:
Mortgage valuation survey from £170
Homebuyer's survey from £300
Full structural survey from £400
| Mortgage valuation survey | from £170 |
| Homebuyer's survey | from £300 |
| Full structural survey | from £400 |
Finally, it is always a good idea to have an emergency fund to cover any cost-overruns or unexpected expenses.
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