Finance

What You Need to Do Before Buying a House

What You Need to Do Before Buying a House

The pandemic was a time when many of us re-evaluated our lives. We took up new hobbies, gained new skills and made grand life decisions. Many Brits got engaged or started a family, and as property sales soared across the country, it became clear many bought a new home in 2020, taking advantage of the extra downtime to renovate their new spaces and upcycle old furniture to add their own unique touches.  

If you’ve watched friends and family jump onto the property ladder recently, you may have begun thinking about taking the leap yourself. But, before you start frantically searching for your dream home, there are a few vital things you need to know. Let’s explore some of the main things you need to do before buying a house.

Set your budget

The first step to buying your first home is to determine how much you can afford to put down as a deposit on a house. Once you’ve determined your ideal deposit amount, you’ll need to work out what you can afford to spend on your monthly mortgage payments. Consider your current income and expenditure when making decisions around this.

Many people forget that buying a house comes with many additional costs. You’ll need to set aside money to pay for extra expenditures such as average conveyancing fees, legal fees, surveyor fees, mortgage fees, moving van hire, financial advisor fees and other services you’ll need throughout the buying process and the move itself.

Find out how much you can borrow

Usually, you’ll be expected to pay at least 10% of the value of your home upfront. Certain mortgage schemes may take applicants who can only make a 5% deposit, although this may mean your monthly mortgage payments are higher. To be able to buy your house, you’ll need to borrow money from a mortgage provider.

The amount you’re able to borrow will be dependent on a range of factors including your income, the size of your deposit and your credit score. If you’re buying a home with another person, the mortgage provider will take their finances into account too.

Apply for a mortgage agreement in principle

Commonly referred to as an AIP, a mortgage agreement in principle is a confirmation from a mortgage provider that they are agreeing to lend you a certain amount of money should you wish to buy a house.

Estate agents are more likely to sell to you if you have an AIP as they trust you will be able to pay what is expected without any issues or delays when the sale is being processed. This makes you a more attractive buyer, especially in comparison with others who do not have pre-approval for a mortgage.

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