1st Time Buying

Now this has to be an essential. If you’re going to eat healthily and cheaply, you need a fridge. You can spend a great deal of money on a fridge, so here I’m going to outline some of the factors that should help make your decision.

Size and space

Both inside and outside. The outer dimensions are important because no doubt you have limited space to put it. Inside determines how much food you can put in. Big families are going to need more food, so need more storage space in the fridge. It’s also worth while making sure the door can be reversed, depending on where you are locating the fridge.

Cosmetics

Most people keep their fridge in the kitchen, so if you care about how your kitchen looks, you’re going to want a fridge that matches the rest of your kitchen. Most manufacturers build fridges in the typical kitchen colours, white, black, grey and silver.

Freezer compartment

Some people choose not to get a separate freezer (or full fridge/freezer), so having a freezer compartment at the top of your fridge would be handy.

Efficiency

In this day and age, economy is on the tip of every bodies tongue. Most fridges come with power ratings, choose the most efficient whenever you can.

Warranty

Quite a biggie, make sure fridge comes with a decent manufacturers warranty and if you’re unsure, ask the retailers about extended warranty.

Others

Worth mentioning I think, our new fridge lets you remove the seals so you can easily clean in behind them, keeping it looking better but also helping it last longer.

Easily forgotten, most first time buyers spend their first few weeks with carrier bags or bin bags in the corner of every room. The rooms where bins are essential are usually the kitchen, living room and each bathroom. The bin kept in the kitchen is likely to be the most used and therefore needs to be the biggest. If you’ve not got somewhere to tuck away your kitchen bin out of sight, it’s worthwhile trying to get one that looks nice. Brabantia bins are very popular at the minute and look very stylish. I recently bought a 50L Touch Bin and although it wasn’t cheap, it’s well made and looks very nice.

This series is aimed at starting to catalog essential items for the first time buyer. You may not think of these as essential, but it doesn’t take long before they become essential. I moved into my house a week ago without a lawn mower and I didn’t think it was a big deal. The weather has been lovely in he UK and that has lead to some serious growth by the grass on my little lawn. That given you still wouldn’t think cutting the lawn would be that essential. But I have a dog, who likes to play on the lawn. He also likes to do other things on the lawn and if that getst lost in the long grass and not cleaned away, he likely trample in it, then come running into the house. Also, I look out the back of my house, see my two neighbours lawns looking neat tidy and healthy, then look at mine and it soon starts to bother you.

I made the mistake of not researching these products before I bought, I just assumed they’re all pretty much the same. Seeing as I only have a small lawn, I figured I’d just get a compact cheap one. turns out the one I got was useless, so I promptly returned it.

If you don’t want to look to far and wide, Amazon has a simple selection of lawn mowers and you can have a quick look through the user reviews and find one that looks the business. I selected a few Bosch models below, all of which had some decent customer reviews.

Amazon.co.uk Widgets

Previously in the How much does it really cost series of articles, we talked about the costs involved simply looking for a house. This time around, we focus on the cost of Conveyancing.

What is conveyancing?

Without going into too much detail, conveyancing involves all the legal ins and outs required for passing property from one party to the other. You can do it yourself, but as a first time buyer I thought better of it.

How much does it cost?

This is the interesting part. It costs a lot. In my opinion, our conveyancers didn’t seem to do a great deal, failed to return phone calls and emails on more than four occasions and to be honest didn’t really help us accomplish anything. They told us we were due to exchange contracts on two occasions, neither of which were successful, but both times we had to call them to find out, they didn’t bother to tell us. Because we were told we were going to exchange and complete at a much earlier date, our conveyancing firm have had our deposit in their account, gaining interest for at least a month. Roughly about £150.00 in our high interest account. So lets count that.

£150.00

Next up are the searches. The house I am buying is 4 years old, so I never imagined there was going to be any hidden suprises and I was right. The biggest suprise that the searches showed up is that there’s a slim chance I may have to pay monies towards the local parish. I sure the searches show up lots of things for others house buyers, but I don’t honestly believe it costs this much to produce them.

Land Registration Fee - £150.00
Local Search Fee - £130.00
Drainage Search Fee - £42.30
Environmental Search Fee - £41.95
Coal/Other Search Fee - £17.63

Here comes the biggie, the cost of their services was xxx.xx. I saw my solicitor once, at which time he virtually read out the searches to me, not really giving any extra in sight or advice and told me we would be exchanging contracts in the coming week. He emailed me a couple of times, but I never got to speak to him on the phone. He potentially should have replied to two of my emails and returned two phone calls, but this didn’t happen. So other than that, he payed in my cheque and placed the order for the searches. They’re handling the transfer of the money, but the seller is using the same legal firm, so I’m sure that’s not all that difficult.

£536.75

Total

This gives us a total cost of £1068.63, albeit including money I would have gained through interest had I been able to hold onto my deposit longer.

I work in IT and run quite a few websites, so there’s no surprise that broadband internet access is a necessity for me. These days though, it’s not just geeks like myself that require internet access and many people can’t put up with the speeds that dial up provide. Broadband is almost a necessity for most households, and if figures are correct, almost a quarter of the population are broadband subscribers. Many people use it for shopping, keeping in touch with old friends, new friends and family. They use it to share photos. With the advent of Xbox Live putting online gaming into the mainstream, gamers everywhere are in need of a high quality broadband service. The question is which broadband provider should I go with?

Unfortunately for me, the house I have agreed to buy is situated too close to Hull for me to have any choice. Hull has it’s own indepedant communications company and as such I can pretty much only have a phone line and internet connection provided by them. This is particularly unfair on Hull residents, who do not benefit from the competitive market of broadband provision. Needless to say, I’m going to explain how I think you should make your choice, which broadband?

Download Limits

The first thing to do is determine what you want the internet for. With the web the way it is today, I’d recommend unlimited broadband, that is no limit on how much information you can download. Nearly every website you go on has some sort of media content, whether is watching news clips on the BBC, or downloading full length movies from amazon unbox.

Download speed

So with download capacity out of the way, speed is the next issue. Most broadband packages in the UK are quick enough to watch streaming media and for general web page browsing. Downloading music, movies and playing games is where speed comes in. If you are like me and you are quite patient,you can wait that extra hour for an album to download, you don’t need the fastest package out there. If you’re going to be gaming, I’d suggest you get the fastest broadband you can afford, that will save any disapointment half way through Call of Duty 4 (Xbox 360). For an indication of how fast your current connection is, try a broadband speed test

Customer Service

A major pointer for me is customer service. Most broadband packages require that you enter into at least a 12 month contract, meaning you are stuck with them. If the service they provide isn’t up to scratch you have to deal with their customer service teams. This should not be underestimated and should be considered when choosing your broadband package. Try searching google for consumer reviews, to get an idea of the kind of company you are dealing with. This also helps you find out if the quality of service meets what is advertised. Many broadband companies fail to provide the speeds they promise.

Wireless broadband

Another pointer is whether or not to go wireless in your home. My recommendation is that if you have a laptop, then go for it. For desktop machines, I prefer to have them plumbed in properly, but it’s nice to have wireless broadband from any room in your house. I’m sat at the kitchen table as I write this, keeping an eye on my puppies. Most packages come with a free wireless router anyway, but if you’re not sure you can always upgrade to a wireless router at a later date.

Mobile Broadband

Another consideration might be that of mobile broadband, through the use of the 3G mobile phone networks. These can be a little restrictive in terms of download speeds and download limits, but they don’t require a phone line, so you don’t have to pay the added overhead of line rental if you can make do with your mobile phone. Worth a look the Motley Fool thinks you can save £200 a year.

Combination TV, Phone and Broadband

This is fairly new thing, with some providers such as Sky can provide you with everything you need, satellite TV, phone line and broadband in very competitive packages.

With all that said, it’s time to choose a package. Try one of the many broadband comparison websites and find the right deal for you.

As I’m sure all readers know, buying a house isn’t just about paying the current owner what the house is worth. There are plenty of one off costs associated with buying a house, some a lot more obvious than others, this series of posts hopes to point out a few of those costs, so they don’t come as a surprise.

The cost of looking

Looking for the house of your dreams, costs both a lot of time and money.

It’s likely that every week you buy newspapers and property guides to browse through, even get them posted to you. You then have to view houses. There are always going to be travel costs involved, but if you are looking to move a fair distance, you should also consider the costs of hotels, eating out and also the possibility of having to take time off work.

Looking for and viewing houses take up time. When you see a house you like, you’ll view it twice. When you see a house you really like, you’ll view it three times. I work full time but have some income from being self employed. This had a double whammy effect on me, because I didn’t have time to do much work around my day job, I had effectively lost both time and money.

Part 2 - Conveyancing

There are quite a few different types of mortgage available to you, your mortgage broker should advise you on what types might be suitable to you, but it’s best to have a read and think for yourself to begin with, that way you have a reasonable idea of what they are talking about.

First you have to choose the type of payments you want to make.

Repayment

With a repayment mortgage, you have to pay both the interest on the money you’ve borrowed and a certain amount of the money outstanding. When you take the mortgage out, you decide on a term, usually 25 or 30 years, which determines how much of the money borrowed you repay per month. This way after the length of your mortgage term, you wont owe anything.

Interest only

An interest only mortgage is sometimes the route taken when people can’t afford to make repayments just yet. In this instance, you don’t actually pay back any of the money you borrowed, you just pay the interest. If you borrow £100,000 and pay the interest for ten years, you will still owe £100,000.

Next step is to choose the type of interest rate you would like to use. This can be particularly difficult, especially if economics isn’t your strong point.

Fixed Rate Mortgage

With a fixed rate mortgage, you pay a fixed rate of interest, usually just above the Bank of England base rate. You pay this rate for a fixed term, which can be anything from 2 to 10 years depending on the fee and rate offered by your lender, after which the rate is usually changed to the lenders standard rate. The advantage of a fixed rate mortgage is that for the initial term, you know exactly how much your repayments are going to cost, no matter what the markets are doing. This safety net could come at a cost if the interest rates crash, but it’s a risk lots of people take. Due to the popularity of Fixed Rate Mortgages, the reasonable cost and the security, there is often a higher fee.

Tracker Mortgage

A tracker mortgage is fairly simple. With a tracker, the interest rate you pay is always a certain amount above the Bank of England base rate. For example if your rate is set at 0.5% above the base rate and the base rate is 5%, you’ll pay 5.5% interest. If the base rate then moves down to 4.5%, you’ll only pay 5% interest and so on. If you think that the Bank of England base rate is going to drop, a tracker could well be the right mortgage for you, but beware that you never quite know how much you’ll need to pay in the months to come.

Variable Rate Mortgage

Like a tracker mortgage, variable rate mortgages often follow slightly above the Bank of England rate, but in this instance the rate is at the Lenders discretion. The rate is called the Lenders Standard Variable Rate (SVR). If the Bank of England rate moves up or down, most lenders would match the move, but they don’t have to. They usually do so that they can compete with the other lenders, but it’s not guaranteed.

Discount Rate Mortgage

This is the same as a variable rate mortgage, except that for an initial term the lender will give you a discount off their SVR. For example the lender might give you a rate of 1% below their SVR for an initial two year term.

Offset Mortgage

Offset mortgages are a neat idea, they allow you to offset any savings you have against the money you owe. For example, if I owe the mortgage lender £100,000 but I have £20,000 in my savings account, I only have to pay interest on £80,000. Lots of people see this an think what’s the point? The point is, that you save much more on the interest that you are not paying than the interest you would earn even in a high interest savings account. And of course it shares the sames benefits of having the money to hand whenever you need it. It is not uncommon for some people to lend more than is necessary for a house purchase on an offset mortgage and leave the excess in the offset account. That way it is effecting their payments, but they always have the cash there if they need it.

Getting a mortgage is one of the biggest things you can do. It is a major commitment. That’s why it is very important to make sure you find the best mortgage you can get.

By now you should have worked out how much you can afford in mortgage repayments per month. The next step is finding out both how much you can borrow and how much you should borrow.

As a rough guide most mortgage lenders will lend you in the region of three times your annual income as an individual, or if you will be buying a house with another person, two and a half times your joint income.

Deposits

If you want to get a competitive mortgage, you are going to need a deposit. Some lenders offer 100% loan to value mortgages, but these rarely offer a competitive rate and cost a lot of money in both the long and the short run, due to high fees and rates. I’d recommend gathering making sure you have a deposit of at least 5% of the property value you would like to look at, 10% being preferable.

At this stage you can get a rough idea of how much you can borrow using the estimating techniques mentioned above, or a simple estimating tool and start looking, but it might be better to enquire about a mortgage and get one agreed in principal first.

Mortgage Advisors

As a first time buyer, I would highly recommend using an independent mortgage advisor/broker. They know the markets and how to deal with every situation you can throw at them. They will take down your details, discuss anything unusual about your circumstances and come back to with the best deal you can find. If you make sure you find an ‘whole of market’ independant advisor, that is that they compare products from all companies, not just a select few, you can’t go wrong. Even better if you use one such as London and Country, they are commission based so it doesn’t cost you anything. Use them to get a better idea of how much you can borrow or even a mortgage agreed in principle and then you can get down to looking more seriously.

I think the first thing most people do when they come to start buying a house is work out how much they can afford. This literally boils down to how much your monthly expenses are, how much of your lifestyle you are willing to give up and how much you have right now.

Rebecca and I both have good jobs, Rebecca is a teacher and I’m a web developer. In living with our parents, we are a little spoiled in that we can afford to spend plenty of money on ourselves. We both understood that this would come to an end when bought a house, but agreed that we didn’t want to stretch ourselves right to our very limits, despite some people recommending we do so.

Budget Planning

Working out your expected monthly expenses can be a little difficult if you are a first time buyer who lives with parents, in that you probably have no idea how much bills and things cost. I countered this by always overestimating and using 20000averages as a guide. To start you are going to need some sort of spreadsheet or at the very least a simple list of incomings and outgoings. Martin Lewis has a comprehensive bludget planner available, although it may be a little over the top.

Insurance

Buildings and contents insurance is a difficult one, it’s something I’ve never had. As a rough guide I’d estimate an annual cost of between £200 and £250, so take £250 as an upper limit. moneysupermarket.com

You’re probably going to want Life protection to go with your mortgage, the cost of which all depends on your, but budget for £20 a month should be way over what the average person will pay.

Utilities and Council Tax

Council Tax. If you know the area you are looking to move to, you can use the Council Tax Valuation List to find out what kind of band you might be in and from there on use Google to find the costs in your area. If you only have a rough idea of which area, take the cost of the middle bands, D or E.

Like most things, your water bill depends on how much you use. Check out the average water rates in your area and add it to your budget.

Again Gas and Electricity all depend on how much you use, but to get a rough idea, run through a quote on energyhelpline.com or moneysupermarket.com. Filling in the form doesn’t take two minutes and as long as you remember to tick (or untick) the option about sending you information, they wont bother you again.

Phone, TV and Broadband

Depending on the area you live, there should be a multitude of options available for Phone, TV and broadband. Selecting a packages that are right for you is never easy, but there are plenty of good sites out there to get you started. Why not try a simple broadband comparison site, or take a look at Sky who offer phone, broadband and satellite TV in one convenient solution. These should give you at least a rough idea of how much the monthly cost will be. Don’t forget the cost of a standard TV licence.

Others

The other new outgoings you might be coming across are that of general household maintenance and food and drink. I can’t tell you how much the maintenance will cost, sometimes that can be just pot luck, but why not try totalling up a shop on one of the online supermarkets, such as asda.com or tesco.com.

How much can you borrow?

At this point you should have a rough estimate of how much money you have left over at the end of the month. I’m assuming you’ve added extra outgoings that make your life interesting such as buying DVDs, books, eating out and the occasional holiday. As a little tip I’d recommend adding a figure or a percentage on to your outgoings, just as a safe guard, maybe £100 or 10%. From what you have left you can decide how much you want to go towards your mortgage. Have a play with a mortgage calculator to see what sort of monies you can borrow, if you’re not sure what interest rates to use, try whacking in 2% above the Bank of England base rate. We’ll discuss thisin more detail later on.

About 8 months ago my girlfriend and I decided to start looking to buy a house together. I’ve lived with my parents all my life, choosing to stay in my home town through university and staying around through my working life as well. Rebecca had been to university down south and had also worked there, before moving back up here hoping to find it easier to get on the property ladder. We’d both being looking semi-seriously for ourselves, but decided as long as we were together it made sense to buy a house together.

This blog is going to detail a few of the processes and experiences we have been through, hopefully it might help someone.