How Much Money Are You Really Going To Need For Your First House?

If you’re saving up for your first house, then you’re going to need more than your deposit and first mortgage payment to get going. Many people don’t realise just how much they need to pay out when moving into their first home. Let’s talk about how much you’re really going to need…

Some Of Your Major Upfront Costs Include:

Your deposit is the most obvious thing, and likely something you haven’t forgotten. It is one of the major upfront costs, and can be anything from 5%-20% of the purchase price. When you have your eye on a house, make sure you figure out how much you need to buy it.

Valuation Fees

The mortgage lender is going to need to assess the house so they know how much they are prepared to loan you. This can be a small amount, but it can also be thousands depending on the value of the property. However, depending on the type of mortgage you have you may not be charged for this.

Surveyor’s Fee

This will help you to understand whether there are any problems before you buy the place. If you choose a good surveyor, you’re going to save money in the long run. It’ll also give you an idea of things you may want to change later on down the line.

If you live in Australia and you plan on doing this yourself, you may need to get a 137b report. This can help to protect you and the things you choose to do.

Legal Fees

You usually need a solicitor to help you do all of the legal stuff before you buy a house. You’ll need to be prepared to pay them too; this is another thing that can cost hundreds-thousands.

Electronic Transfer Fee

Yep, you even get charged for having the money transferred from the lender to the solicitor. It isn’t a huge payment compared to everything else, but it all adds up. You may even encounter more small fees like this, so it’s always worth reading the small print and staying aware of what you’re agreeing to.

Furnishings

It’s unlikely that you’re going to move into a fully furnished house, so you’re probably going to need to buy your furnishings. Having things like a bed, sofa, and other essentials is important right from the get-go. Things like a TV may be able to wait. How much this costs will depend on your taste and how much you want to save (second hand stores anyone?).

Having An Emergency Fund

Having an emergency fund is a good idea. Not only does this make it easier to get accepted for a mortgage, it gives you peace of mind. Having 6 months of living expenses in your bank will cover you should you lose your job, take a pay cut, or even have a real emergency. You can’t afford not to have an emergency fund when you decide to take on a responsibility like a house!

Bonus Tip For British Readers

If you are using a Help To Buy ISA, you will not have access to the Bonus payment until after you complete on your house sale, so the bonus money cannot be used as part of your deposit. However, as this article has highlighted they’ll be plenty of other things you will need money to buy after the house sale is completed so it’s a great source of extra funds.

Hopefully, you now see just how much you need to have saved up to get your first house. Good luck!