House Buying Costs Often Underestimated
The majority of people living in the UK either want to buy their own home, or already have bought property and at some time or other have wanted to move house. To most buyers, the greatest obstacle is raising a large enough deposit to meet lenders’ loan to value criteria and being able to afford the monthly repayments on a home owner loan.
Although many focus on getting the best home owner loan or mortgage to meet their needs, around 20 per cent of buyers fail to take into account the money they will need to furnish their new house and make it into a home.
A new survey from Money.co.uk has found that 21 per cent of purchasers spent somewhere in the region of £23,000 more on buying their home than they anticipated and then spent more on the finishing touches than they had budgeted for.
The survey also found that a buyer typically spent an additional £8,000 on their new home in the first twelve months of ownership, although almost a quarter of individuals had not put money aside for this purpose and required some kind of additional loan.
Although some of this money came from long term savings, a large proportion of these additional funds were raised through either a credit card, a personal loan, or a secured loan or further advance on the original home owner loan, all of which adds extra cost to the household budget.
Chris Morling of Money.co.uk commented on the figures, he said “These findings demonstrate why methodical planning and budgeting are such important steps to buying a property. It is all too easy to overlook expenses and end up in a precarious financial position. Households with debt piled upon debt are most likely to be at risk during tough economic times.”
