Once you’ve decided to buy a property, the most important first step is to use a mortgage calculator UK to work out exactly how much you are going to need to borrow. Whether you use a buy to let mortgage calculator and base the amount on how much you feel you can charge for rent in order to make your repayments, or take a look at an interest only mortgage calculator and work out a savings plan, you will need to factor in a number of other costs before you work out what you can afford.
The cost of the property itself is only one factor in how much you will need to borrow as buying a property has a number of other costs which many buyers (especially first time buyers) won’t remember to factor into their budget.
Firstly, any property you buy will first need a full structural survey to ensure that the property is sound and whether you will need to make any improvements before you can move in. Some lenders will accept a survey from your own surveyor, but a number will want to run a valuation and survey of their own which will cost more. Double check with your lender what kind of survey they will accept before signing anything.
You will need to pay a solicitor for arranging the mortgage and there will be costs on top of this such as the Land Registry Fee. Ask your solicitor for a full break down of costs in advance so that you are not surprised when you get the full bill, and if anything catches your eye as possibly unnecessary question your solicitor about it.
Over the course of your repayment term you may want to switch to another mortgage deal, or feel the need to go on an interest only mortgage arrangement for a short time. These options could save you money or get you out of a difficult financial spot, but do look over your contract and ask your lender in advance whether you will have to pay any extra fees for leaving your mortgage plan. With some mortgages you will even have to pay a fee should you want to overpay and pay your mortgage off quicker than the term set out in the agreement.
If you think you might want to pay off your mortgage quicker, you could look at an offset or flexible mortgage which will allow you to do so without any extra costs being added.
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