Do you dream of holding the keys to a new home in your hands? If so you’re not alone. Most of us have an inherent wish to be a homeowner someday. Wes and me have been toiling away at trying to get there for ages, but we realise that nursery fees have put paid to that for now. Doesn’t mean we don’t know a thing or two about it though.
In the past, it was very common for young people to leave home in their 20’s and buy a house. My grandparents tell me that they got their house for around £1,500 and borrowed the money from my grandad’s employer to get it! Can you imagine that now? Today, the situation is very different, and it’s not uncommon for people in their 30’s or even their 40’s to struggle to get onto the property ladder.
If you long to climb onto that first rung, this guide is here to help.
Saving for a deposit
That thing we can’t seem to do! Before you can buy a house, you need a deposit. When the credit crunch hit, almost all providers and lender stopped offering 0% deposits, and this means that you now need a substantial sum to put towards the acquisition of a new home. Typically, you can expect to pay between 5 and 10 of the sale price as a deposit. If you’re buying a house for £150,000, for example, the minimum deposit you’re likely to need is £7,500. Saving anything can be difficult once you’ve covered the cost of rent, household bills, food, and petrol. If you have children to feed and clothe, it can be even tougher to put money aside.
If you do want to buy a house, it’s best to start saving as soon as possible. Even if you’re only putting a small sum aside each month, it’s better than nothing. Open a separate savings account, and transfer a set amount on a monthly basis. If you have months where you have a little more available, you can always add to your balance.
There are lots of different ways you can reduce the amount you spend at home. These include cutting costs on socialising, switching energy, insurance, and broadband providers, and using less energy. You can also lower your food bills by collecting vouchers, planning a weekly menu in advance and shopping online. All these small savings could add up to a significant sum, which you can put towards your first home fund.
Getting a mortgage
Very few people can afford to buy a house outright (if you can, you don’t need this guide!), and this is where getting a mortgage comes into play. A mortgage is a loan, which you take out to buy property. You agree on a sum and a term, and you pay back the loan over the course of time. There are hundreds of different loans and lenders out there, and this can make it tough to decide what to do and which firm to choose. If you don’t know anything about mortgages, it’s essential to meet with advisers, so that you can go through options, and receive advice that is tailored to you and your financial situation.
Most of us tend to get carried away when we’re looking for new houses, but try and wait until you’ve got a solid mortgage offer on the table until you begin your property search. You want to have accurate ideas about your budget, or you run the risk of falling for something that is out of your reach.
Don’t rush into making a decision when it comes to taking out a mortgage. Mull over the figures, and take your time.
Setting your budget
Buying a house isn’t just about getting a mortgage offer, and then exchanging contracts when you have an offer accepted. Sadly, the process is more complex, and there are additional fees involved. When you buy a house, you won’t just pay the asking price. You’ll also need to cover stamp duty, legal fees, and the cost of surveys. When you enter into the process of purchasing property, you’ll need guidance from a legal expert, so it’s a good idea to get some first time buyer conveyancing quotes. Individual firms will charge different amounts, so it’s wise to shop around. Once you’ve taken all the numbers into account, you can work out a realistic budget for your search.
Image: Free Great Picture
Finding ‘the one’
Once you’ve got a budget and you’ve chosen a location, your property search can begin. Use the Internet to look for homes for sale, and get in touch with local estate agents. Try not to write houses off because of photos you see online, as they can be very misleading. If a home ticks all the boxes on paper, give it the benefit of the doubt and arrange a viewing. Try not to be too spontaneous when you’re making a decision. If you get that feeling when you walk through the door, go back and have a second, or even a third or fourth viewing before you take the plunge.
We are living proof of how tough it can be to get onto the property ladder, but don’t lose hope! Start saving, get some expert advice, and hopefully, you’ll be the proud owner of a new home before you know it.
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