A new home can be very expensive when you consider all of the expenses that go into keeping the house and property in tip top shape. In this regard, a mortgage interest calculator can be a useful tool. As a homeowner, the British government will hold you to high standards so you need to ensure that your property follows all statutes, regulations and laws. Financial experts note that if you are spending too high of a percentage of your income on housing, then your home may be unaffordable.
What Makes a Home Affordable?
A new home is about more than just the house. It includes the property and taxes that will be assessed as a homeowner. When you let (or rent) a property, the landlord is responsible for a myriad of bills that you never see.
When you have a home, you will need to furnish it properly and this will require added expenditure for curtains, chairs and furniture etc. Maintenance will include general repairs such as fixing light bulbs, sweeping the floors, washing, windows, metalwork, toilets and so on. If anything breaks, you must fix it yourself or hire someone to complete the job. Many people are way too busy to repair everything that breaks in their homes themselves. It pays to look at how much general handymen are charging for their services when you budget for a new home purchase.
Furthermore, if you have a lawn or garden, then you might need to perform some external maintenance. This might be as basic as mowing the lawn or planting some flowers. As seasons change, this will include dealing with rain and falling leaves. You will need to purchase all of the necessary lawn equipment. Some councils may fine you for tall grass, so you should budget for proper landscaping .
Utilities and Stamp Duty
Add electric, gas and water bills to your monthly budget when you consider purchasing a new home. And don’t forget your stamp duty bill. Many governments are raising these taxes to pay for shortfalls in their budgets. It pays to anticipate a certain increase in your stamp duty every couple of years.
Healthy 40% Percent of Your Income
In general, a banker will look at your income and surmise that it is acceptable if you are spending about 40% of your income on housing. Since the Credit Crunch, more consumers have been worried about mis-sold financial instruments. A financial institution may want to complete a sale and give you a mortgage you can’t afford. So, be careful.
The housing market remains full of supply. You should be able to get a good deal, so shop around and add up all your expenses. Sometimes, it is wise to say “No, I can’t afford that home” for the sake of your financial health.