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As a first time buyer it can be difficult to know where to begin in trying to work out how much money you have for the deposit and how much to spend on your monthly mortgage repayments. Your monthly outgoings as a homeowner will differ from those of a rent-payer, even if you take out a Shared Ownership Mortgage.

So, what payment costs do you incur when you buy your first home and what kind of monthly outgoings do you need to budget for?

Before you begin your house-hunt in earnest, it is essential that you sit down and work out how much money you have for a deposit. This may not just be a question of the money you have saved towards the deposit so far, as you need to remember that you will have some one-off payments when buying your new home. These one-off payments will include:

*  Legal cover

*  Stamp duty

*  Evaluation searches

*  Solicitor’s fee

And may also include any payments you may have to make on:

*  Furniture

*  Decoration costs

*  Yearly bills such as TV licence or phone installation costs, ground rent/service

Once you have a clearer idea of how much money you have for your deposit you then need to calculate how much you will be able to afford to spend on your mortgage repayments each month. In order to do this you need to take into account your monthly outgoings – these will differ from the ones you may have at the moment and also if you move out of your current area into a new area, say from Yorkshire to London. Use the checklist below to remind you of all the monthly payments you might incur:

*  Bills (such as council tax, water, gas, electric, phone

*  House insurance

*  Mortgage protection cover

*  Food money

*  Car/transport costs

*  Gym membership

*  Pension (if you have one)

*  Clothes

*  Money for socialising

Once you have calculated these monthly payments you will then have a better idea of how much you will be able to spend each month on your mortgage. You can then enter your deposit into an online mortgage calculator to give you an initial idea of how much you can afford to spend on the price of the house itself. This will help you when you speak to the mortgage adviser as more information helps them to find the best mortgage for you.

Unless you are putting a large deposit down on the property, your mortgage company or lender will probably carry out a survey for its own purposes. This is called a valuation and simply verifies that the property is adequate security for the lender’s loan.

For your own peace of mind, and perhaps as a bargaining tool, it’s therefore a good idea to commission your own survey. This can be either a Home Buyer’s Report or the more expensive full structural survey – although this usually only applies to older or unusual properties.

Having your own survey carried out will ensure you are aware of any problems such as damp, dry rot or subsidence. It will also highlight remedial work that needs doing, which can be factored into the price. A survey could even save you from buying an unsuitable property.

The Home Information Pack, introduced in June 2007 will enable you to see at the outset some of the costs associated with running the house and any cause for concern regarding the condition of the property.

Useful websites

www.rics.org.uk  â€“ industry body.

You will need to appoint a solicitor or property lawyer to deal with the conveyancing and legal formalities of the property transfer.

Some solicitors will charge their fee as a percentage of the value of the property and others as a fixed fee. Ask for quotes and seek personal recommendations. Some solicitors that specialise in conveyancing offer an online service.

Following the acceptance of a formal offer, the solicitor will make any pre-sale enquiries between you and the vendor and take you through the exchange and completion of the sale.

Before the point of exchange, your solicitor will carry out one or more ‘local searches’. You may want to supplement this search by researching what’s going on in the surrounding area yourself. For instance, you can ask the local planning department if any applications have been made to build new properties adjacent or relevant to your prospective purchase. You can also ask other people in the neighbourhood what it’s like to live there and what’s going on in the area.

Usually about a week prior to ‘moving in day’, normally known as the ‘completion date’, you will exchange contracts with the vendor. You will need the mortgage offer to be in place by the time contracts are exchanged.

At the point of completion, your name will be registered with the Land Registry and you will have to pay Stamp Duty Land Tax. The solicitor will arrange this for you. At this stage, you will also pay any telegraphic transfer fees for transferring money from one account to another

You should aim to move into the house on a date convenient for yourself, the vendor and any other parties in the chain above..

Help for First Time Buyers. Useful websites

www.sfla.org.uk

www.lawsociety.org.uk

www.solicitors-online.org.uk

www.landreg.gov.uk

www.conveyancer.org.uk

www.sspc.co.uk

www.espc.com

Note: The law and buying and selling procedures are different in Scotland, where the ‘offers over’ and ‘fixed price’ systems can be confusing. Generally speaking, solicitors become involved in the buying process at an earlier stage than in England and it is sensible to make contact with a solicitor before you start serious house-hunting. Making an offer in Scotland is a more formal step than in England and can lead to your making a legal commitment to buy at an earlier stage.

Removal companies

When you move into your new home, you might move all your possessions yourself, hire a ‘man-with-a-van’ or use a professional removals firm.

Ring around for quotes.

Find out whether your belongings are insured during packing and transit. You may prefer to take out your own third-party insurance rather than using the removal firm’s insurance, as this can work out cheaper.

You may need to decide how many of your belongings you wish to pack yourself and how much you want the removers to pack. Bear in mind that many removal firms will not insure items that they have not packed themselves.

If you need to store your furniture for a while, think about self-storage as a cheaper option than paying the removals firm. Remember to check what insurance is required while your possessions are in storage.

Make sure you keep any removals company up to date with the moving-in date.

Make sure all pallets are labelled with their contents, and provide a room plan of your new property. Colour-code both plan and pallets so that the removal men can pack your belongings into the vehicle in the right order and unpack them again at your destination.

Utilities

You will need power, gas, water and phone, so find out from the estate agent which firms supply the services, so that you can make them aware that the meters need reading and that you will become responsible for those utilities from that date.

Help for First Time Buyers. Useful websites

www.ofwat.gov.uk  â€“ regulatory body for water.

www.ofgem.gov.uk  â€“ regulatory body for the gas and electricity markets.

www.ofcom.org.uk  â€“ regulatory body for communications.

Remember to keep out the kettle, milk and tea so you can brew up when you’ve moved in!

By Helen Adams

 www.FirstRungNow.com