Get to grips with your finances when moving house
Moving house is expensive, so it is important to know your budget and what you can realistically afford to buy for whilst also managing to live your life. Getting to grips with the figures before you start your search will prevent disappointment late. Read this article to find out how.
If you are thinking of moving house, you might have in mind the type of property you want to buy, whether you are looking to move up the ladder in value or looking for more space or a new location. But you might not have given much thought to your budget at this stage. The danger here is that you fall in love with a new property, only to discover that you can't afford that property, leaving you disappointed before you've even got started.
It's crucial to have a clear understanding of your budget before embarking on your house hunt. This preparation will empower you to search for homes that are within your financial reach, ensuring a more realistic and satisfying purchasing experience.
Property value: The first thing you need to know is the value of your current property. This can be established with a valuation from an experienced estate agent. Get in touch with our team to arrange this for you. Alternatively, if you are not quite ready for an in-person appointment, you can use an online property valuation tool to give you a broad idea of the potential value that your property can achieve. This is not a 100% accurate figure, but it will provide you with a rough ballpark to work from, using an algorithm to suggest a price. To see how much your property might be worth, simply click here.
Outstanding mortgage: The next step would be to determine your current mortgage's outstanding amount. This can be done by either checking your most recent mortgage statement or getting in touch with your lender to ask how much is outstanding. Taking the outstanding mortgage amount away from the estimated value of the property will leave you with your equity. This is the amount you would receive in cash if you were to sell the property or the amount you can put down as the deposit for your next purchase. You must also consider that fees for estate agents, mortgage, legal fees, and possibly stamp duty will be deducted from this amount.
Savings: If you plan to buy a property for a higher price than you are selling for, you might be considering using some savings to bolster the deposit. It is a good idea to establish how much you have available in savings and how much of those savings you wish to include in your budget.
Mortgage Advice: It would also be a good idea to speak to an independent mortgage advisor to learn about the mortgage products that may be available to you. The mortgage market changes frequently, so any advice you had a year or even a few months ago will be outdated. Up-to-date mortgage advice will give you the final piece of the puzzle to help you determine your budget. You might be given a figure much higher than you were expecting, particularly if you opt to increase your mortgage borrowing significantly, but that doesn't mean you need to use this whole figure as your budget. Make a decision about a budget or a range of prices you feel comfortable with based on the monthly mortgage payments. Whilst buying the perfect home might be your dream, overstretching yourself financially could be a huge mistake.
If you are ready to get started in your search for your new home, get in touch with our team to arrange your property valuation and register your information to be kept informed of new properties as they come onto the market for sale so that you don't miss out!