Getting The Perfect Mortgage-Affordability
As mentioned before one of the main factors to consider when considering a mortagge is affordability.
salary. This should be sufficient in purchasing the house of your dreams. However if the interest moves up by 1-2% you could find yourself in a spot of trouble with regard to repayments.
You should consider greatly the family or household circumstances regarding how much you can afford to spend. The house of your dreams could slowly become the house of horror. It is nice to be able to go out with your wife or partner for a meal or drinks, and not have to worry about paying the mortgage.
The repayment on your mortgage should not be greater than 40% of your net monthly income. If it is more than this, then you could be borrowing too much and payback and money problems can arise.
More cost implications
Getting a mortgage is not the end of financial side of things. You also need to have enough cash to pay for all the extras that come with buying a house e.g. stamp duty, solicitor’s fees, removal costs, surveys, estate agents fee´s. A list of all the extra´s can be obtained from your mortgage lender.
Surveys Fees and Searches
¯ Mortgage valuation survey - from £170
¯ Homebuyer’s survey - from £250
¯ Full building structural survey - from £350
¯ Arranging the mortgage £200
¯ Legal Fees £400
¯ Land registry fee £100
¯ Other searches from £70
Stamp duty
Stamp duty must be paid on all property transactions over £60,000. There are exceptions in some disadvantaged areas of the UK where the level is £150,000.
Also some stamp duty exempt places around Britain. The Inland Revenue website lists all the areas that qualify.
£60,000 0%
£60,001-250,000 1%
Over £250,000 3%
Over £500,000 4%
The amount of duty paid on the house purchase, is for the full amount of the purchase, not the amount over the Taxable amount.
As you can see from the fees above, getting a mortgage is just the tip of the iceberg. With all the arrangement fees, building fees, search fees, legal fees and stamp duty, your mortgage and expenditure has just gone up over £1000, this is without adding on the stamp duty for your potential home. If you decided to buy a home for £200,000, you will have pushed your moving expenses into the region of £3000, before you have even received the keys to your property.
You should take all these hurdles into consideration when looking for a new home and try to save a little to help pay for these extra expenses. Not only do you have the legal side of things, but there is also the moving side and decorating to consider. All these factors should be taken into account when deciding to buy your new dream home.
