Do you want to buy a new home? If so, the first thing to remember is how quickly your budget can change.
You’re not here to invest in real estate, so you don’t have to manage your budget whilst also trying to maximise your profit, but you do need to be careful about the way your money moves over the next few months.
The seller you’re trying to secure a property from may ask for a higher price, you may be hit with a reduced income, and you may even be undercut by another buyer.
That’s why it’s essential to factor the three things below into your overall budget right now. Buying a new home can be a smooth process when you’ve accounted for financial matters like these.
When Will You Sell Your Old Home?
Buying a new house before selling your old one isn’t impossible, but it can be precarious. You need to be very careful about how much you’re willing to pay, especially if you’re still in the process of securing a mortgage as well. Freeing up capital is the name of the game here, but when you’re bogged down in the paperwork whilst simultaneously having your eye on a property, the pressure to move fast can be hard to ignore.
However, being pre-approved for a mortgage doesn’t usually take too long, and you can reenter the real estate market with this approval to secure the home you want. You can also turn to short term solutions like Bridging Loans to cover the cost of purchase in this interim period. Again, you’ll need to do your research and ensure you’re only taking out a loan you really are capable of paying back, but the sooner you can sell your old home, the better!
Lock Down Your Basic Expenses
These expenses cover the things you absolutely need to live. Food and water, as well as heating and electricity, to name a few. Covering the cost of those over the next few months, and reducing extraneous spending, alongside looking for a new home you can afford, will be the number one way to lower costs and increase your savings pot in the short term.
Don’t Forget About the Fees
Both buying and selling property involves a hefty amount of fees, and even when you’re buying a new home and selling the old one, one or two of the fees you’ll be subject to can leave you out of pocket.
If you’re not careful about the budget right now, you may not have enough to fully cover them all. Thankfully, you can work out what these fees are likely to be ahead of time. Things like stamp duty, for example, can be calculated using online tools and then factored into your budget.
If you’re in the process of buying a new home, double check your budget stacks up against points like these. Don’t let the market move you before you’re truly ready to afford the next step.
