How much can I buy for?

Working out your overall budget is easier than you may think.

Be realistic

Once you have decided to buy your first home it is likely that you will have a pretty good idea of what you are hoping to be able to spend.  Chances are that you have spent some time walking around your local estate agents and been looking on a property portal site, such as: Right-Move.

The golden rule here is to be realistic.

Many first-time buyers start off by being unrealistic about what they can afford to buy for and then get disappointed when they realise they are having to look at properties that are below what they thought would be available.

The best place to start is to carry out some basic research using the lenders affordability calculators, this will give you a pretty accurate idea of the maximum you will be able to borrow.  Once you have that figure - simply add the amount you have available for a deposit, and you will have an approximate value of the home you are able to buy.  

Here's an example:

How much deposit do you have?

When you're buying your first home, chances are you will have a relatively small deposit that you have either saved up over time, or that you have been given a gift from a family member.  Lets say that you have £15,000

Costs to consider

Many first-time buyers assume that all the money they have can be used towards the deposit of their new home.  This is a mistake as there are other costs that need to be considered - such as:

1

Stamp Duty

Stamp Duty Land Tax (SDLT) is a tax that everyone has to pay if they are buying a property that is £125,000 or more.  The higher the purchase price, the higher the amount of tax you will have to pay.  You can find out exactly how much your Stamp Duty is going to be by heading over to Governments Stamp Duty Calculator.

Purchase price bands
Percentage Rate
Up to £125,000
0%
Above £125,000 and up to £250,000
2%
Above 250,000 and up to 925,000
5%
Above 925,000 and up to 1,500,000
10%
Above 1,500,000+
12%
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To give you a rough idea of how much you should allow for this cost, here are 5 examples:

Purchase Price
Stamp Duty Payable
£125,000.00
£0.00
£130,000.00
£100.00
£175,000.00
£1,000.00
£250,000.00
£2,500.00
£350,000.00
£7,500.00
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2

Solicitor fees

When buying your first home you're going to need to employ the services of a solicitor to carry out all legal side of transferring the house in to your name.  They also need to act on behalf of your mortgage lender to ensure their interest is also registered.  this process is known as conveyancing.

3

Lenders fees

When buying your first home you're going to need to employ the services of a solicitor to carry out all legal side of transferring the house in to your name.  They also need to act on behalf of your mortgage lender to ensure their interest is also registered.