Financing Your First Home Move

My Finances

The House Shop has teamed up with My Finances to advise first-time buyers in to the daunting and sometimes confusing world of deposits and house purchase. The wealth of exciting and glamourous, quaint and traditional properties available up and down the UK’s stunning cities and countryside are depicted in their full glory on the House Shop website.

The House Shop’s easy-to-use, sleek interface navigates around the site enabling agents and individuals the chance to list their properties for free. The House Shop also helps individuals make some initial plans with their instant valuation calculator. This tool lets you check your own property for an average, low and high end sale price, and can also give a quick and convenient low to high end of how much the property could potentially be let out to rent.

How Much Deposit Do You Need?

Building up a deposit is one of the biggest hurdles of getting on the property ladder. Rising house prices have meant that those looking to buy their first home often need to put down tens of thousands of pounds as a deposit – which can seem impossible unless you’re earning a fortune, or are lucky enough to have family prepared to stump up the cash on your behalf.

A sum of 5% of the property value is the absolute minimum you will need to put down and, even then, your choice of lenders and deals will be restricted. If you want to be eligible for a wider choice, you’ll need a 10% deposit. While this is beginning to change with Help to Buy government incentives, many tentative lenders have been asking for a minimum of 10% deposit. A modest property costing £200,000 for example, will require £20,000 deposit.

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Schemes To Help First Time Buyers

Aside from Help to Buy, many Housing Associations are offering a part-ownership scheme –  check out the local housing associations in your area for more details. This is a scheme where part of your home can be paid off through a mortgage while the rest is rented – right to buy schemes are also becoming popular.

Stamp Duty – What Is It?

Stamp duty is a government tax payable when purchasing a property. Homes worth less than 125.000 are exempt from Stamp Duty but after that the cost begins at 1% or the property value, increasing to 3% upon properties above £250.000.

OTHER COSTS: SURVEYS, CONVEYANCERS and ESTATE AGENTS FEES.  The legal checks and documentation of mortgage arrangers and conveyancers charge at least £1000, and there are certain compulsory surveys to check the sound structure of the property.

How Much May I Borrow?

Mortgages available to an individual or a couple are calculated by several different factors. The term of most mortgages are over 25 years. Lenders will never overlook real assets or earnings, so as a rule of thumb, the statistics look like this:

Individual Mortgage Holder: 4 x annual Salary per year.

Couples’ Combined Salary: 3 x combined Salary per year

For more information and free listings browse the House Shop.

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