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Buying a house marks a new chapter. It is a chance to start fresh and decorate a place you call home. A place that you can fill with wonderful memories that you will cherish for a lifestyle. The concept of buying your own house and decorating it is exciting.
However, the process of buying a house is rarely smooth. Finding a home that you love, with all or most of the amenities you want, in the area you wish to live in but is within your budget is just one obstacle to overcome. Another obstacle is the costs involved.
Throughout the house buying process, there are various costs involved. One of the main costs is the price of a house. In the UK, house prices are rapidly rising. During the past year, house prices across the UK had increased by 9.8%. It is reported as being the fastest rate house prices has risen since 2007.
There are also solicitor fees, inspections, and applying for a mortgage that can add up. As buying a house is a costly process, it is important to consider all of the financial factors involved.
If you are preparing to buy your first home, here are some of the financial factors to keep in mind to help you navigate your way through the process.
Having A Budget
Many will have a clear idea of what house they are looking for. It could be having a certain number of bedrooms, a spacious garden, parking, or good transport links. Knowing what you want in your first home can help narrow down your search, but it can also cause disappointment. The dream house you have in mind could tremendously exceed your budget.
Before your search begins, identify and understand what your budget is. Decide on the amount over your budget you are willing and able to extend should you find a property you love. Having this budget in place lets you see what types of property you can afford. You can find a property that you can afford but also love.
Getting A Mortgage Approved
The process of getting a mortgage approved is one of the most stressful parts of buying a house. It focuses a lot on your finances and if you can afford a home. Many providers will want to know your income and spending, as it will help determine how much you can afford to borrow.
When buying a house, you will have to pay a deposit. You will be asked if you can afford to pay a deposit on a home in the mortgage approval process. In addition to this, providers will also consider if the source you have the money from is acceptable. Another aspect they will consider is your credit history. If you have had credit issues in previous years, this will be something that they take into account when processing your mortgage application.
Spend time to look into what options are available. You will be able to understand how much you should expect to receive. Additionally, it will also help you select the best option available, one that is the most suited to you. If you are struggling financially, look into utilising the services of businesses such as Money Nest. Their team of advisors will help you obtain a loan that is best suited for your situation.
Cost Of Insurance
Understandably you will want to have your home insured in the event of a house robbery, significant damages and natural disasters. Having insurance in place will help reduce the costs needed to repair or replace lost or destroyed.
There is currently no legal requirement to invest in home insurance for your property. However, when you begin to look for getting a mortgage, you may find that some providers will ask that you invest in some form of insurance to protect the property. It might be included as part of the conditions in the contract of them agreeing to approve your mortgage.
When looking at houses, consider the area that the property is in. If the home is close to a river, is the house at risk of flooding should there be a heavy storm. Look into how safe the neighbourhood is. If the area has been a popular target for home robberies, the cost of insurance will likely be higher. Keep these factors in mind when you look. It will enable you to create an estimate on how much you should expect to pay on insurance to protect your home.
The process of buying a house is time-consuming. There will be moments of uncertainty, times where the process flashes by and times where it feels like nothing has changed. Having your finances in order can be greatly beneficial. It could help to speed up the process and simplify certain aspects. Before you know it, you will have found your first home and have moved in. Ready to start the next chapter.