Setting a budget for a house purchase is essential for the first-time buyer. You must account for both upfront and ongoing expenses. You also need to consider the monthly costs of carrying the mortgage. This will ensure that you do not become house poor. A good rule of thumb to follow is to spend no more than 30% of your monthly income on housing.
The Chancellor of the Exchequer, George Osborne, delivered a budget today and the impact will vary depending on which policy changes are made. Some welcome the extension of the Help to Buy Equity Loan scheme until 2020. Others have expressed concern over the lack of clarity around a plan for an exit from the scheme after two years. Also read https://www.as-ishomebuyer.com/sell-my-house-cash-bartlett-tn/
Despite the rising cost of living, more homes are being listed for sale. Real estate agents are reporting that bidding wars have cooled off in some areas. Other parts of the country are already seeing price dips. Meanwhile, energy and gas prices are increasing across the country. This makes it difficult for Americans to budget their finances and determine the mortgage payments.
You should also consider the length of time you plan to stay in the house. A higher price is desirable if you are planning to stay in the home for five years or more. You can also consider if you need to make payments towards retirement or pay off debts. All of these factors will affect your budget for a house.
Another change the Chancellor has made is to extend the Stamp Duty holiday by three months until September. You should also note that the government will be guaranteeing mortgages with a 5% deposit. If you are a first-time buyer, you’ll still get some benefits from this change.
While it may be tempting to stretch your budget, it is wise to make sure your finances are realistic. You need to take into account the initial costs of home ownership, as well as the ongoing expenses like property taxes and homeowners’ insurance. Likewise, you should be prepared for the costs of routine home maintenance. If you cannot stretch your budget, you should pause your search and make adjustments accordingly. This will keep you from overspending and save you money.
The down payment is another important aspect of the house purchase. Depending on the type of mortgage you get, you may have to put as little as 3% down on the house. You can also look into down payment assistance programs if you are unable to make the minimum required down payment.
