If you’re in the market for a property, then you’ll probably be choosing between a new build and an existing one.
The former variety of home offers a number of advantages that the latter cannot replicate, including improved energy efficiency, superior features, and increased scope for customisation.
New build homes can come in many forms, from modern townhouses to spacious detached cottages. To realise your dream, however, you’ll need to think about finances from the very start. Let’s take a look at the process of budgeting for a new build.
Know the Numbers
You’ll need a strong grasp of the numbers you’re working with. How much money do you have to spend? Is another outside source of finance feasible? Look at your existing debts and savings, and plug them into a budgeting tool.
You can find specialised software that’s built for the task, or you can take a more traditional pen-and-paper approach. If you’re unsure of yourself, you might consult an independent financial adviser. In many cases, this investment will allow you to avoid costly mistakes further down the line.
Beyond the Purchase
The costs of a new property go beyond the asking price. You’ll also need to budget for a range of additional costs. These include conveyancing fees, stamp duty, and the money you’ll pay to surveyors. In the case of a new build, you probably won’t have to worry about renovation – but insurance, utilities and other running costs will need to be factored in. After all, you don’t want to suffer long-term financial stress as a result of the short-term decisions you made before the purchase.
Mortgage
Don’t settle on the first mortgage offered by your bank – instead, shop around. Lenders compete with one another, not only using the interest rate, but via other perks. You can often secure the best possible deal with the help of a mortgage broker. Look for one that’s qualified and reputable, and whose fee is justified by the savings you’ll make.
Building a Buffer
Buying a property is a complex and expensive process. You can expect unexpected costs to arise, from time to time. What if a survey uncovers a problem? What if you run into unexpected administrative costs? What if the cooker breaks down immediately after you move?
You can protect yourself against these problems by having an extra reserve of cash that can provide you with a buffer. This will stop you from having to resort to extra debt, while protecting you against financial stress.
In Conclusion
A well-planned budget makes buying a new-build home much less stressful. You can come up with a budget on your own, or with the help of an expert in finance and property. In many cases, the latter option is the cheaper one in the long term!
