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Would you go over budget for the perfect home?

Would you go over budget for the perfect home?

Category: Mortgages

Updated: 22/08/2016
First Published: 22/08/2016

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

When you're looking for that perfect home, it can be easy to be swayed into spending more than you were planning to. After all, it's often difficult to find a property that ticks all the boxes, but just how far over budget are you prepared to go?

Research from Ocean Finance shows that 78% of respondents would be prepared to go over budget to find a home that meets all their priorities, with 62% prepared to pay up to 10% more for that perfect property. This could add an extra £28,000 to the price of a typical home, says Ocean Finance, so that quest for perfection can certainly come at a price!

It isn't just buyers who are prepared to push the boat out, either, with renters also admitting that they'd be willing to spend 10% more than they bargained for to secure that must-have home – which could add an extra £76 per month to the cost of their rent, or £912 per year.

In fact, 2% of respondents said they'd be willing to go more than 20% over budget – equating to £56,000 on top of the original purchase price, or an extra £156 per month (£1,872 per year) in rent – just showing how far some people will go to live in their ideal home.

Indeed, only one in four said they wouldn't go over budget at all, with this group more likely to make compromises rather than extend their property budget.

"Whether renting or buying a property, most of us have a budget that we can afford in mind," said Ian Williams, Ocean's spokesperson, "yet three-quarters of us are happy to ignore the budget and stretch our finances to get the home that ticks all our boxes."

It may be tempting when you've found the property that fulfils your every need, but don't dive right in before you've covered all the bases. You'd need to make sure that you'd be able to get a mortgage deal for that higher purchase price, for example, and if you're renting, you need to be absolutely certain that you can cover that extra rent every single month.

The same applies with mortgage repayments. A bigger mortgage will generally result in higher repayments, and you'd need to be confident that you can cover that extra amount. You may want to counteract that to some extent by putting more money towards a deposit – in which case you'll need a suitable savings pot – or by increasing the term, such as opting for a 35-year mortgage term rather than a 30 or 25-year.

These factors will all require careful consideration, so if you don't think you can afford to go over budget to get that perfect home, try to think with your head rather than your heart – you could always save more to find that perfect home at a later date.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.