There will come a time in your life when you feel like living at home with your parents just isn’t what you want anymore. You will eventually need to have some independence and the ability to spread your wings and find your place in the wider world.

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Once you have resolved yourself and know that you want to move out and find your own feet, you will need to find out if you can afford the move. Moving home involves a lot of additional costs, they will often involve costs that you have never even heard or been told about, so make sure that when you come to buy a home, you have a decent buffer in your savings account for anything which may be thrown in your direction.

How much can we borrow?

When you come to look for houses, you will first need to find out how much you can borrow from the mortgage lender towards your home. This will determine the house price range you will be looking at. Use a house loan calculator online to find out how much you are expected to be able to borrow, and then also visit a mortgage lender to get some advice on your current situation and see if they think you are in a position to be buying a home.

The amount you can borrow will depend on a few different factors in your life. It will depend on how much money you earn a year; how much money comes out of your account for essentials each month such as childcare and car insurance; and also factors such as your age. The amount you can borrow will also depend upon the bank you go with - so don’t be afraid to do some research and get a few different quotes to work with.

Putting down a deposit for a mortgage

When you buy a property, you will have to put down a deposit as a lump sum at the start of the process. This is the money which will seal the deal and allow you to exchange contracts with the seller. In most cases, you will be required to put down a minimum of 10% of the overall cost price of the home. However, there are some banks which will allow you to go as low as 5% - which is mostly aimed at first-time buyers who are trying to get themselves on the property ladder. Again, you will need to be prepared to do some research and find out which banks allow for this if you don’t have a large enough deposit to put down 10%.

How much will the property cost?

The mistake that many first-time buyers make when it comes to purchasing their first home is not researching all of the extra costs involved in buying a home. While you may already have enough money to cover the deposit - that is not the only thing you will need to pay out for during the process. Here are some of the extra costs which you will need to save up for:

• Stamp Duty - This is a land tax which can cost up to 7% of the total value of your home. It is one you will need to calculate using a stamp duty calculator.
• Solicitor Fees - Solicitors don't work for free, and the cost of admin and drawing up the contracts can set you back over a thousand, if not more.
• Surveys and valuations - Your mortgage lender will require you to carry out a survey on the home before they accept your mortgage application.
• Furniture - Once you have bought your home, you will need to furnish it. White goods, a sofa and bed can cost you a lot of money, so make sure you have sufficient amount saved up for these.

How will we pay for the monthly mortgage payments?

Most of the time, the interest rate which you pay on your mortgage each month will depend on the deposit value you put down initially. And you can also change the interest rates you pay depending on the type of mortgage you go for:

• Fixed-rate mortgage - this means that the interest rate will stay the same, regardless of changes in the market, for a period of either 2.3 or 5 years. This is recommended for the first few years of your mortgage because the repayment won't fluctuate during the time. 
• Tracker Mortgage - Rather than the interest rate staying the same, it will fluctuate alongside the wider market. This can be beneficial if interest rates suddenly dip, although there is a risk that they will rise.

How To Save Up For A House

The easiest way to save up for a deposit on a home is to regularly pay an amount of money into a bank or building society savings account. As you put money in, you will accrue interest on your savings and come out with a little bit more at the end.

If you struggle being able to save up and budget your money efficiently, you may need to start looking at your finances more thoroughly and much more often. The key to being able to save up your money is to understand fully how much money you have. Take the time to go through your bank statement at the end of the month and you will see how much money you have incoming from your employment, and you will also see how much money you spend on things like your phone contract, food, insurance and other costs. Once you’ve looked at the essential costs and subtracted that from your earnings, you’ll be left with your expendable income. This is the money you have left at the end of the month to buy food, go out with your friends or do some retail therapy. The key is to cut down these spending habits as much as you can, in order to give you a certain amount of money to save up each month. 


My Say

Owning your own home may entail some sacrifices. That said, those sacrifices will be worth it as you enjoy the fruits of saving up for your own home.