Home Budgeting Finance 5 Financial Considerations For House Buyers

5 Financial Considerations For House Buyers

Whether you’re a first-time buyer, an old hand, or a buy to let investor, buying a house is no small purchase. So you need to be sure that you’re making a wise financial decision before taking the plunge.

save_moneyResale Value

Before investing in any property, it’s a good idea to consider how ‘sellable’ it is before you even buy. Curb appeal, size, location, and proximity to good schools or public transport are all important factors for potential buyers to consider. So if you can tick all these boxes and the area remains the same, you should be on to a good financial bet. However, it’s always a good idea to check for any upcoming developments in the area. If a waste disposal site is planned for the field over the road, you’ll need to change your plans!

Cost of Buying

The cost of buying a home isn’t all about the cost of the house. Always take into account the following extra costs you will have to stump up the cash for:


Mortgage Arrangement Fees

Stamp Duty

Legal Fees

Valuation Fees


Removal Costs

Estate Agent Fees

Mortgage and Income

Lenders will assess you based on both your living costs and mortgage costs, so you need to be sure you can comfortably cover your mortgage and living costs to buy a home.

They will also factor in future interest rate rises, so you need to bear this in mind too. Generally, most lenders will calculate what mortgage repayments you can afford based on a quarter of your take-home pay after tax. Using an online mortgage calculator is a good way to get an idea of what you can afford. Whatever you do, you should also factor in ‘what if’ scenarios. If for example, you lost your job, could your partner bear the cost until you started work again?

Mortgage in Principle

If you have no actual house in place but want an accurate idea of what you could borrow, you can arrange for a ‘Mortgage in Principal’ MIP). This tells you how much you could borrow if you find somewhere within a certain time. This can give you a head start when making offers on a property, as proof of deposit and a MIP can be a big advantage in a competitive market.

Buy to Let Finance

If you own an existing property and are considering investing in buy-to-let, then your finance options are slightly different. You will still need a deposit of at least 25%, but a remortgage deal could work out to be a cheaper option than a buy-to-let mortgage. Alternatively, you could consider a bridging loan to help with the costs of a house purchase if you have existing assets you can draw on to pay the loan off within a short period of time. Bridging loans are often more expensive than conventional loans, but the advantages include speed and flexibility. Use a broker such as First4Commercial to help you find the best deal. Click here to find out more.

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