Getting on the property ladder is a big step, and it’s a process that takes time. You need to start by looking at your budget, since you’ll most likely need to stretch your finances considerably if you hope to afford even a one-bedroom house. You probably also have an endless list of questions, especially concerning mortgages. As a first-time buyer, you may be eligible for a mortgage that’s backed by the Help-to-Buy scheme. This means you only need to bring a 5% deposit to the table, which means you won’t have to save for years on end to reach the higher deposit usually demanded. Unfortunately, it also means your mortgage will be huge, so there are positives and negatives to consider. Read on to find out what else you need to think about.
Start saving now.
Deciding to buy a property is one of the biggest personal financial decisions you’ll ever make. It’s a decision that’ll inevitably affect the rest of your life, so it needs to be well thought out and researched. Start by calculating how much you can afford to save each month and commit yourself to it. The more committed you are, the faster you’ll reach your saving goal. If you’re a little under your goal one month, it’s not the end of the world, but try to make it up next month. Additionally, don’t be tempted to dip into your savings just because they’re there. You should only be dipping into savings if you have an emergency bill to pay, not for an expensive pair of shoes or a night out.
House hunt regularly.
House hunting is one thing people tend to enjoy. Learning about houses before you see them in person will help you better understand what you want. Find out how long it will take you to get to work, the schools in the area, and what public transportation is available. You may also want to know local crime rates and consider how close each house is to the nearest shops. This might all sound fun, and it can be, but it’s easy to get downtrodden when you find the perfect house, only to find you can’t afford it. Even worse is finding a house that you can afford, only for it to be snatched up before you had a chance to view it. Don’t be disheartened – if you were able to find a nice house now, there’ll be another one you like just as much in the future.
Give yourself time, be patient and be prepared to be realistic. The last thing you should do is get your heart set on a particular property that you have no chance of being able to afford. With that in mind, you should be realistic and accept that you’ll need to start small and work your way up. This is why it’s called the property ladder, after all. Even if you find a gem, you should be prepared to walk away if the asking price is too high. It can be useful to write a list of must-haves and nice-to-haves, which will help you to set your sights in reality. For example, if you only really need one bedroom, don’t be tempted to look at 2-bedroom houses.
Research mortgage products.
At different stages of our lives, we will all need financial flexibility. While some of us are lucky enough to be financially free, others only just have enough cash left over at the end of the month to live off, whilst some have to make substantial monthly sacrifices in order to afford anything at all. One way to improve your finances is to take out an affordable mortgage, a loan secured against the value of a property. Mortgage rates fluctuate massively depending on the economic climate, however, so if the government crashes the economy, your mortgage rate will sky-rocket.
Getting on the property ladder is one of the most satisfying experiences, especially when you’re finally in a position to start building your own home. However, there are many steps you need to take to make sure you don’t pay more than necessary and to get the best possible deal.