You have decided that you are buying a property, but exactly how much can you afford? On top of the cost of the house itself, there are many other, one-off expenses involved in buying a home and moving which can be around £12,000, according to consumer website Which. In order to get a good idea of what sort of homes you can realistically hope to buy, you also need to take these extra costs into account. To help you do your sums, here is a guide to working out how much money you have to spend and what the costs are. Take particular care with stamp duty land tax as, with the recent inflation of property prices, for properties over £250,000 this has become a major consideration.
Calculating Your Price Range
You need to work out:
- The amount you will get from the sale of any current home
- The amount you can borrow (see How Much to Borrow?)
- The amount you have in savings or investments which you can use
- Once you have done this, work out how much the other one-off costs of buying and moving will add up to (see One-Off Costs)
- Deduct this sum (4) from the total sum of 1, 2 and 3 and you will have a rough estimate of the kind of price range you are looking at