Moving into your new home as a first time buyer or renting for the first time in Stratford upon Avon or any location in the UK can be quite a daunting and stressful time. We all have to leave the nest as to say some time, even though you may be used to saving money out of your wages each month for say going out or personal expenses budgeting to move into your new property or moving out of the comforts of your parents house is respectively very different.After all buying and moving into your new home is probably going to be the biggest financial commitment you will make in your lifetime.

Therefore, before taking that big step onto the property ladder you need to respectively work out what you can comfortably afford each month with respect to either getting a mortgage or maybe renting in Stratford upon Avon.

To do this you need to take a realistic look at your budget by doing this you will be able to work out just how much you can afford to outlay each month for a mortgage or rent a house and other related costs and for any necessary improvements to the house.

Plan Your Budget.

Firstly, start with your net income this is your income after deductions of tax etc and make a note of this. Then work out all your expenses including everything that you have to pay out for during a month do not try to miss any items of expenditure out as this will give a false picture after all you do want to maintain your current lifestyle to an certain extent if possible.

Utility Bills

As well as paying the mortgage amount each month, you will have to allow for utility bills paid each quarter like gas,electric,telephone,council tax etc. Respectively you will not be able to work out how much these bills will equate to until you actually move in apart from the council tax( particular banding for property) then it will depend on your particular circumstances and usage(winter and summer months variance).

But nevertheless you still need to budget for these bills on top of your mortgage payment.

Personal Spending

Then include all your personal spending like going to the movies in Stratford upon Avon or concerts,food costs, eating out at restaurants  in Stratford or you maybe a member of a gym or health club in Stratford,petrol expenditure for travelling to work and back.

As I explained before you need to include as much as you can to get a realistic picture of how much money you will have left at the end of each month to work out how much mortgage you can afford.

You can either work out your expenses on a weekly basis then just times it by four, but certain costs will vary such as food costs and utility bills depending on usage(winter and summer months) so it may well be that you will have to take a average of these costs instead of trying to get an exact figure. By following these simple steps you will have a better understanding of how much you can comfortably afford before buying your house. A very important note to remember is that interest rates can go up as well as down and there are no end of different types of mortgages that are available on the market at the present time.

Some of these are designed to help first time buyers onto the property market with fixed interest rates or tracker mortgages which are fine as long as the term exists (Normally 3 to 5yrs). However, remember when the fixed term ends what will your mortgage payments be and even more important at what rate will the interest be at?

None of us have crystal balls that we can look into to predict the future of the housing market and where interest rates might be in the next year or five years from now but it just might be advisable to work out your overall mortgage budget with these costs added in as approximate amounts just as a sensible precaution.

Renting

Not everybody can afford to buy a house so renting in Stratford might be another option when you are considering moving out so once again to work out how much rent you can afford each month use the same method as before where your net income minus all your prospective outgoings for each month will give you the figure that you need.

In the case of renting instead of buying, some estate agents will tell you that not everyone should own a home. Certain people are not just cut out for home ownership for a number of reasons so what is the best way to make that decision here are a few pointers.

Bad Credit Rating

If you have a bad credit rating then getting a mortgage is going to prove difficult or you will not receive a good interest rate for a loan, even worse you may try to find a better lending rate from another lender ie a bad lender or even a loan shark not a good start at all.

Job Instability

How secure is, your current job in Stratford in these days of factory and business closures can you or will you be able to afford a mortgage for the full 25yr term. You may be able to afford your mortgage payments now but what happens if you lose your job or maybe your partner who pays a certain amount into the mortgage loses his or her job.

Also, consider if you think your job might be in jeopardy you might have heard about upcoming lay-offs or possible voluntary redundancies at your place of work.

Take into consideration that if you do lose your job how quickly you will be able to get another job, redundancy payments may not be enough to cover mortgage payments for long the same goes for mortgage payment protection schemes that will only pay the interest on your loan for a period of twelve months or so.

Home Repairs and Maintenance issues.

Your new home is going to require upkeep and maintenance do you have enough savings or enough money coming in each month to tackle such projects.

Not many first time buyers can afford to hire professional tradesmen to carry out work or major home improvements like say a new kitchen, a new bathroom, including items or things that break in the house.

Ideally you should set aside at least 5% of the purchase price of your house to cover repairs and maintenance as a rule.

Consider the Costs.

If say your mortgage payments were three times the amount, you would pay to rent a property then it is common and financial sense not to buy a property but to rent it out instead. An example would be where it costs you say £500 a month to rent a house but if you were to get a mortgage on the property then your mortgage payments would be £1500 a month.

New build against an older property.

After you have worked out how much of a mortgage you can afford and whether you would like to buy or rent your new home consider also whether you would want to purchase a new house rather than an older property.

Respectively once again it comes down to the affordability factor, if you as a first time buyer have the funds available to afford a new build then the advantages are quite clear.

For one you will not have to fork out any money for any home improvements therefore saving you a considerable amount of money on such things as a new bathroom, double glazing, a new kitchen or even landscaping the garden. Disadvantages of a new build is that in most cases new builds depending on what type of property you are looking for cost considerably more than a older type of property. Therefore, you may not need to do any modernisation but your mortgage payments in the end might be considerably more than if you purchased an older property at a lesser price.

Therefore, as an example you buy a three bedroom detached new build at £220,000 and you have a mortgage of £200,000 over a 25yr term then your monthly payments will be £847 per month. However, if you were to buy a three bedroom detached property of a similar size say that was built 30 or 40yrs ago for £180,000 and you have a mortgage of £160,000 over the same term then your payments would be £647 per month saving you £200 per month.(based on a capital repayment type mortgage at 2%)

In addition, remember once any improvements or repairs on older properties have been carried out and paid for you do not have to worry about them again as you are not going to be having a newly fitted kitchen installed every year!

Yes possibly maintaining an older property or heating a older property say the experts might cost more but once again such improvements as double glazing and cavity wall and loft insulation will help in the end.

However, inevitably this all depends on the individual you may not want the hassle of having to modernise and refurbish but would rather just move in instead of having tradesmen in your house over a number of months.

Moving in Costs.

Whether you buy new or old you are still going to have to buy furniture for your house so allow for such items as sofas, settees, a TV set, dining table and chairs,beds,wardrobes,kitchen items,cooker,washing machine etc.

The best method is to go through each room in your new house and make a list of all the furniture that you require to be in that room and don’t forget to include carpets,curtains,light fiitings etc. You will be surprised at how the cost of such items can spiral and as a first time buyer purchasing brand new may not be an option friends and family maybe able to help out.

Therefore, the pros and cons are there whether you wish to buy new or old or rent or buy, after all buying a house is a life long commitment and it is always best to do your homework and research before purchasing your ideal home.