Planning on Buying A House? - Here’s Our Top Budgeting Tips

Getting your foot on the property ladder could be the most astute financial move you’ll ever make, but it takes sacrifice, discipline and determination.

Banks require now at least a 10% deposit, (after being burned by some bad loan decisions prior to the 2007 Northern Rock financial crisis). The average price for a flat in our area; Abingdon, Oxfordshire is now more than £200,000 and approximately £320,000 for a terraced house.

New house buyers should also be acutely aware of the additional costs of buying a house. It can cost around £9,000-£10,000 in fees, (such as stamp duty, legal fees, valuation fees for mortgages, surveys, removals, energy performance certificates).

However, Government “help to buy” schemes and new lifetime ISA products, are encouraging people to save tax free, and are a direct response to the wake of the housing crisis.

Whether you want to upsize your home or become a first-time home owner, there are some simple measures you can put in place to help achieve your ambition. We’d like to offer you our top tips, picked up during our combined experience of helping people to buy their first home!

Set a target

The bigger the deposit you can raise, the better the mortgage deal you can get - but it’s always easier to follow a path when you have a destination in mind. Set an amount you want to achieve and work out how much you need to save each year, each month, to get there.

You might want to consult an Independent Financial Advisor (IFA) or there are some good online guides available via Money Advice Service and Money.co.uk.

Put the money somewhere safe

Set up a separate account for your savings so you aren’t tempted to dip into them to get your car through it’s MOT, pay for a holiday or splurge on a shopping trip. Help to buy ISAs, or Lifetime ISA’s are a great, tax efficient way to save. Money Savings Expert provides a great reference to the different mortgage schemes available. 

Cut down your outgoings

Take a look at your bank statements and review your outgoings. Are there any unnecessary or luxury outgoings you can cut back on? Can you buy your essentials more cheaply elsewhere? Can you save on insurances?

Home buying isn’t easy and it’s going to take some sacrifices on your part, but you don’t have to live on porridge! Most people can afford to put aside 10% or earnings every month with some planning. Make it easier by setting up a standing order into your ring-fenced savings account.

Maintain a good credit rating

While you’re busy saving, don’t forget that banks will be checking up on your credit history when you apply for a mortgage, so:

  • Build up a record of credit card use, but make sure you pay off your monthly bills in full.
  • Avoid creeping into overdraft territory in your current account.
  • Don’t fall behind on ANY payments - be it the car, credit accounts or any other financial commitments you have.

Are you a first-time home buyer in the Abingdon area?

Buying a new home, especially if it’s your first, is an important but daunting step. Yet if you set a realistic target and stick to a plan - there’s no reason why you won’t succeed!

At Simpsons we help first-time homebuyers by making the process as stress free and simple as possible with honest, independent and local advice.

We’d be happy to offer you free advice about finding a home in the Abingdon area, just give us a ring on 01235 520079 or contact Simpsons of Abingdon.