When it comes to buying a home, there’s more to consider than just finances. Although the first question you’ll probably ask yourself will be “how much can I afford?”. However, there are other things that are just as important that you’ll need to consider when buying a house.
Whether you’re purchasing your first home or your fifth, navigating the house market can be a time consuming and confusing process. Doing proper research, understanding your priorities and ensuring there are no hidden issues or surprises are important steps when buying a home. In this article, we’re going to explore what to consider when buying a house to make sure you’re as prepared as you can be!
Location, location location
Great name for a TV show, but also something that some people would argue is the most important consideration in house purchasing! It’s not unreasonable to want to live in a desirable area, so when on your property hunt it’s important to consider the distance to nearby shops and amenities, catchment areas for schools if you have children, how easy it is to access travel routes and commute to your place of work.
You may not mind being on a busy road, or you may prefer a more secluded, quieter location; but make sure you have a good understanding of your preferences and where you would be likely to make sacrifices. If location isn’t one of them, then make sure you’re only looking at houses that fit your criteria to avoid disappointment.
Size
Once you have a good understanding of your desired location, it’s time to consider the size of the house you’d like to buy and how much space the lot and property needs to offer. Size of the property can have a major impact on the use and potential of your home, especially if you want to expand on the property with an extension or build an outdoor space like a garage or workshop. Or perhaps outside space doesn’t bother you, and you’d prefer to have more bedrooms and indoor space?
You’ll need to make sure the property fits your requirements, so check the dimensions and consider if each room will work for you, or if renovation will be required. This is all important to figure out beforehand as knocking down walls or building extensions will all come at an additional cost to you down the line.
Home appliances and fittings
When buying a house, we all want to make sure we get our money’s worth. Houses that are sold with additional home appliances, fixtures and fittings can be a great way to make sure you’re getting more bang for your buck.
Additionally, if the house has a boiler from the 90s, this will be at least a couple of thousand to replace, similarly with stoves and fireplaces. When viewing the property, check the condition of the fixtures and fittings and ask how old the appliances are. You can also look into fitting smart gadgets to customise your home to your specific preferences, and may even save money with the addition of smart meters and more eco-friendly boilers.
Age of the house
The age of your home is a serious consideration, and can make or break the purchase decision. Although older homes can be more charming and visually appealing, they often require more maintenance and upkeep. Floorboards may need changing, the likelihood of damp and rot is much higher, and problems may arise further down the line; make sure you’re aware of any issues and are willing to put the time and money into renovating and restoring the property.
Homebuyer reports or surveys can be an important step if buying an older property, a property in an unusual location, or with unusual construction. These reports can warn of potential costly problems with your prospective new home and help you to negotiate with the seller if necessary.
If you’re mainly interested in new builds, this won’t be so much of an issue, however that doesn’t mean you can assume the property is perfect. You should thoroughly inspect the property when you move in and over the following months as some problems may not be obvious straight away.
Debt-to-Income ratio (DTI)
When considering finances, an important first step is understanding your debt-to-income ratio. A DTI ratio reflects the proportion of your monthly income that you spend on paying off any existing debts; these may be credit card debts and personal loans, car finances or any other existing monthly loans or debts. For example, if your monthly income is £2000 and you spend £500 of that on personal debt, your debt to income ratio would be 25%.
A DTI ratio below 20% is considered the best and will help you secure a better rate mortgage as you’ll be classed as low risk, but anything below 50% shouldn’t prevent you getting a mortgage. A DTI ratio above 50% may cause concern for lenders, so it’s important to consider this when you’re buying a home.
Affording the deposit
When buying a home, it’s important to understand the mortgage deposits you’re prepared to pay and how much you’ll need to save. Mortgages are typically available at up to 95% loan-to-value meaning it’s possible to get a mortgage with a deposit of 5% of the property’s price. So if you’re looking to buy a £200,000 property, based on the different deposit sizes you’ll need to save:
5% deposit: £10,000
10% deposit: £20,000
15% deposit: £30,000
You’ll need to understand the type of mortgage you’re looking to afford and make sure you have saved enough to pay the deposit when buying your property.
Selling your existing property
If you’re moving from one property to another and own the house you’re moving from, you’ll need to include this in your considerations. Do you have equity in your existing home you can put towards your new mortgage? Are there outstanding debts/payments on your current mortgage you need to pay off before getting a new one? These are all things you need to check before buying your new home.
How can Key Solutions Mortgages help?
At Key Solutions, we’re on a mission to build the best mortgage and protection broker in the world, one that people connect with and are proud to be a part of. If you’re looking to buy a home, remortgage a property, or raise capital, we can help you choose the right type of mortgage, and support you through the whole journey. Contact our team today and we’ll be happy to help.
