Looking to buy a home? Who doesn’t want their own home!
And yes, if you’re also planning a new home, please make sure you follow this article for financial factors to consider when buying a house. Finance is one of the most important things as it’s the price which will decide what kind of and where you can buy a new home.
Let’s start and look for the top financial factors to consider when buying a house-
This is the very first thing that you would see in any new house. Even in a city, the location influences the price a lot. If you talk about the UK, the mean price of a home is GBP 231k. But if you will compare the price by city, there is a huge difference. For example, the mean price of a new home in London is GBP 485k while in Glasgow it is just GBP 121k. Below is a quick report which shows the mean price of a new home by the city in the UK-
So, plan your location wisely and see which location can suit your budget along with your requirements.
Down payment options
Whenever you buy a home, you need to pay some percentage of the price which is called a down payment from your pocket. Usually, this part of the overall price will be 10-20%. And you should be prepared enough to pay this part from your pocket. Although there are other ways to make the payment something in terms of a piggyback loan or second loan but be careful when taking an additional loan. Along with all these, make sure the home is affordable and for which you can use an online calculator like SoFi.
The next top financial factors to consider when buying a house is the mortgage amount. After you pay your down payment, the very next thing you should look for is the mortgage. For this, you can evaluate different banking and financial institutions for the interest rate and other offers on the mortgage.
Once you have finalized the bank and know the interest rate, I would advise you to use any mortgage calculator. Using the calculator you will come to know the monthly EMI you need to pay per month and many other financial details. This will help you keep track of the EMI and other payment options. I just used a simple mortgage calculator to find how much monthly installment I need to pay. You can find my calculation here for a mortgage of GBP190k.
Insurance and taxes
When you’re buying a new home (read it dream home 🙂 ) you may want to get insurance for your home against disaster and major damage. At the same time, banks or financial institutions will also take insurance against you. So, you must check these options before finalizing your home. Property taxes can also be paid as a part of the mortgage through the same account. Further banks will also require you to get insurance on your actual mortgage as well.
Move in property vs under construction
Last but not the least, one of the top financial factors to consider when buying a house is the status of your home. If you’re buying a new home, there can be two options- buying a move-in property that can be either a builder home or buying from the existing home. The second option can be an under-construction property. Usually, the under-construction property will cost you less and so again a financial decision for you.
These were the top financial factors to consider when buying a house. If you’re also planning a new house, make sure you have all these factors considered and evaluated.