First time buyer - how much money should we budget for on top of the desposit?

stoddler

We're looking to buy a house at £150k. We have around £18k available outside of our current accounts, and will need a 90% mortgage, so 15 of that will go on the deposit alone.

In others' experience will £3k be enough of a buffer on top of the deposit? We're aware of having to budget £1k for solicitors, £500 for home buyers survey, £200 for lender's valuation. The mortgage we're looking at doesn't have a fee. Of course, there's also £1500 stamp duty, although I understand we can do that within 30 days of completion, by which time we'll have at least one further month's salary coming in.

The maths we've done suggests it's do-able, but I'm worried at how little room for manoeuvre we have. Oh, and we do have £5k available on a credit card if we're really stuck. Obviously we'd prefer to avoid this.

Any thoughts/experiences would be great!

monty-doggy

What about removal costs, first months mortgage payment (usually higher and in advance as interest accrues from day of exchange) and what about settling old bills at your rented place if you have one, buying furniture you may need etc?

monty-doggy

Btw I had survey done via lender. Homebuyer, was £495 but then no valuation fee as its included.

R_P_W

All sounds too tight to me!

Not something I would want to be doing.

What is income? What will your new outgoings be? Do you have other debts? Will you have to buy stuff to furnish etc?

Seabee42

It is possible that your first house you put an offer in might not proceed to sale, so sometimes you can pay surveys and legal fees which does not go to the purchase of the house you end up buying.

I would therefore personally want more margin.

stoddler

It's a local move so removal costs won't be too bad - a few hundred I imagine. We would give two months notice on our current place once completion takes place, so there's also that overlap with the first mortgage payments to consider. But at least by this time more of our salaries will have come in. We expect the mortgage to be around £800p/m, which is the same we currently pay in rent.

Household income is £75k, with (at best) a £1500 a month surplus over our current living costs (incl rent).

No other major outgoings or debts, and we won't need new furniture for now.

StuC75

Dont forget the first months Broken Interest payment on the mortgage, this 'can be' almost as much as a regular payment thats taken along side the first months DD..

stoddler wrote: »

, there's also £1500 stamp duty, although I understand we can do that within 30 days of completion, by which time we'll have at least one further month's salary coming in.

The maths we've done suggests it's do-able, but I'm worried at how little room for manoeuvre we have. Oh, and we do have £5k available on a credit card if we're really stuck. Obviously we'd prefer to avoid this.

Any thoughts/experiences would be great!

somethingcorporate

The solicitor would probably expect you to have given them the money for SD prior to exchange so if you plan to pay later (which as you are aware is within the rules) you should give your solicitor as much notice as you can.

I think those costs look quite tight, I'd probably look to have a couple of £k in reserve just for emergencies but as long as you plan well then seems perfectly reasonable.

monty-doggy

Are you sure the sellers of your new place will wait two months after completion?? It's normally a few days! Or a couple of weeks at the very most!

lazer

I think you are fine.

I had less than £1k more than the deposit and survived - it wasn't easy but worth it to out as much as possible down as a deposit and save in the long run

One other thing to remember is that it will generally take about 6 - 8 weeks for the sale to complete so by that time you will have a bit more saved.

I moved myself - with the help of family with a trailer to transport a few bigger items.
Furniture was second hand and hand me downs from family

The one thing I hadn't budgeted for was oil - the tank was empty when i moved in - so i didn't have any oil for a few weekas - but did have an open fire for heat!

hazyjo

monty-doggy wrote: »

Are you sure the sellers of your new place will wait two months after completion?? It's normally a few days! Or a couple of weeks at the very most!

Not sure what you're referring to. Stamp Duty? Doesn't go to the sellers...

Average sale/purchase takes around 12 weeks so you might save even more.

Give notice on exchange. You don't have to wait until completion. Are you saying you'd pay 2-3 months' rent (depending on when notice dates fall) and a mortgage? You could arrange 4 weeks between exchange and completion - that'll save you a month's rent in that case.

Jx