Buying a home: Can you afford it? Property Guide Furniture in Fashion
Buying a home is a serious investment that requires lots of financial and emotional resources. First thing you have to do is decide how much money you have. Can you really afford buying a home? A lot depends upon the amount of money available � how big a house or a flat you can buy, whether it will be an old or a new one, etc. Keep in mind that besides the house price there is a number of additional expenses, such as fees (survey and valuation fees, land registry fee, mortgage lender or broker fees), taxes (value-added tax, Stamp Duty Land Tax ranging from 1 to 7% of your overall purchase cost), local authority searches, the buyer's solicitor's costs and removal expenses. All these costs need to be covered and may turn out to be unexpectedly high. Some of them, like a survey and valuation fee, are non-refundable. Also, make sure you`ve paid all your housing bills from your present place of residence, as you will have to cover all of them when you move out.
Please note, that the Stamp Duty Land Tax may vary in UK and in Northern Ireland, so consult government websites for more information. If you doubt whether you can afford buying a house, chances are you haven`t considered a possibility of getting a loan. You can get a loan for buying real estate from a bank or from building society, and have at least some of your expenses covered. Building societies now offer certificates to prospective buyers, stating that they will provide a loan, if you decide a certain house suits you. Such certificates ensure sellers that the buyer is financially reliable.
After you and a house seller have agreed on a deal, it`s still not the time to relax: a deposit on exchange of contracts is due for payment 2-3 weeks before the deal is finalized and after you have received your loan to cover property expenses. This deposit usually equals 10% of the overall price of your new home.
More expenses will concern your newly bought home. If the land it is built on is leasehold, you will have to pay ground rent; also, you will be obliged to pay water rates and council tax, if you live in England and Wales, and rates, if you live in Northern Ireland. Your property must be insured, so your expenses will include life insurance and insurance on the building and its contents. Also, make sure your new home is energy efficient: the heating bill is also a big item of expenditure
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