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BLOG articles: Quick Guide: Mortgage Affordability
Whether you are upsizing, downsizing, relocating or simply fancy a change of scenery, Maxwell Moore can advise you on a suitable mortgage for your move. This could even mean taking your existing mortgage deal with you.
You're already a homeowner, but ensuring you are ready financially is still important when taking your next step on the property ladder. Make sure you have considered, and budgeted for, the following costs.
- Deposit - you'll need at least 5% of the purchase price, but interest rates are more competitive if you can provide 10%. Your close family can gift you the money; it must be a true gift with no requirement to pay it back for a lender to accept it.
- Stamp duty - if you don't sell your existing home and buy the new one at the same time then you will have to pay the second property stamp duty rates; as long as you sell your former home within a certain time period, you can apply for a refund of the extra stamp duty you paid. You can use our handy calculator to check what you will have to pay.
- Legal fees - you'll need to instruct a solicitor to act for you. The legal fee is usually based on the purchase price of the property and there will be additional costs known as disbursements which includes searches and fees to the Land Registry. We're happy to provide quotes if required.
- Removal costs - you will no doubt have acquired quite a lot of things so remember to budget for the cost of moving them to your new home.
- Furnishings - if you're moving up the property ladder then it's likely you'll want some new furniture to fill that extra space.
- Running costs - you'll be used to all those bills, but bear in mind they are likely to be different for your new home so we'll help you check what your new costs are likely to be.
The big search
You've done it all before but we still think it is worth remembering, the agent is there to sell the property so they are not an impartial advisor for you!
- Think carefully about what you want, in fact make a list! Then go through the list and decide which things are essential and which you're prepared to compromise on. It is unlikely you will find that dream property that provides absolutely everything you want, so you will need to compromise on something.
- If you want to buy a flat then it is very likely to be leasehold which means you will have to budget for the ground rent and service charge costs. In city centre locations these can be significant so find out about them early. Some houses are also leasehold so be sure to check. If you don't want these additional costs then you should consider looking for freehold houses.
- If you have the opportunity then visit the area before booking your viewing. You may find you simply don't like the neighbourhood, parking may be a nightmare, it may be noisy, there may be no public transport links. There's no point viewing a property if you don't want to live in the neighbourhood!
- Be prepared to see beyond decor and focus on structure and layout. Is there storage, or space for it, in bedrooms; will that gorgeous sofa you want fit in the lounge; are there radiators everywhere; are windows draughty? It's a lot to take in on a first viewing so if you like a property, book a second viewing to go back and focus on how you would live there. Carpets and wall colours are easily changed in time so don't let them put you off!
- If you have or are planning children, then you'll probably want to check out the quality of the schools and their catchment areas.
You found the one
When you finally find that one property you love, do some research before jumping in. Zoopla and Rightmove are helpful for this.
- How long has it been on the market?
- Has the price been reduced since it went on the market?
- Ask the agent what interest there has been and if there have been any offers (they may not always tell you).
- Use your research to inform the offer you put forward. It doesn't have to be for the asking price, but likewise if a property is very popular, then it may need to be higher than the asking price. This is where engaging Maxwell Moore early really helps as we can vouch for your ability to get a mortgage.
Once you've had an offer accepted then be organised. Respond to enquiries from, and provide information to us and your solicitor promptly. This will help to ensure that things progress as smoothly and as quickly as possible.
Protecting you and your home
We don't just love helping you find the right mortgage, we're passionate about ensuring you can stay in your home. That's why we'll discuss how to protect you and your family in the event of unpleasant things happening; unfortunately the mortgage and bills don't go away even if your income does, and your family won't want to move if you die. Find out more on our insurance page.