Buying a house is one of the most significant commitments many of us will make in our lifetimes, but the process doesn’t need to be as scary as it might seem at first. There are many steps to consider during this process and, of course, many costs. But if you take the time to understand all of this and learn about some of the things you can do to improve your chances of securing a mortgage and even saving up for a deposit, things might go much more smoothly than you initially thought they would. To help, here’s our quick guide to buying your first home.
Save Up For A Deposit
This initial step stumps many people. Sadly, even though someone may easily handle the monthly payments on their mortgage and other bills, you won’t be able to get a mortgage for a property without that initial deposit. Saving up for a deposit may seem like it’ll take a very long time, but there are some things that you can do to maximise your results during this time. First, you should assess your income and expenditure.
Think about how much you spend on certain things that you perhaps don’t need and create a strict budget plan for you to follow. This will allow you to identify those unnecessary expenses and entirely cut them out of your budget. It’ll then allow you to spot anywhere you could cut costs a bit, such as reducing your grocery shopping costs. Then you can see exactly what you’re able to set aside each month in your journey to saving up for that deposit.
Additionally, consider getting a residential property assessment. This
assessment can give you a clearer picture of the property’s value, helping
you plan your budget and savings more effectively, as advised by Focus 360
Get Help With Your Deposit
While improving your savings is essential, sometimes the small amount you have left for your savings at the end of each month isn’t enough, even after pinching every penny. There are a few other things that you can consider during this time. You can get a lower deposit via the government’s Help to Buy scheme, which offers 5% deposits for mortgages on certain properties. This means that you’ll then pay slightly higher monthly costs, but this is rarely the thing stopping-first time buyers. Saving for a deposit can be difficult today, especially when paying high rent costs and covering other essentials on a basic salary or even an hourly wage. You can also improve your saving rate for a property using the Help to Buy ISA. You put up to £200 of your savings into that ISA each month, and the government will add 25% (up to £3k) once you buy your first home. It’s not perfect, but it can help.
Find A Mortgage Lender
Once you manage to save up for your deposit, you’ll then want to look into finding a mortgage lender. This is often a bank, but there are other options too. Remember, though; it’s important to be aware of one major factor when finding a lender. That is your credit score. Many people get rejected for loans and mortgages based on having poor credit, and lenders are often very picky with who they give mortgages to. This is understandable in that a poor credit score can suggest that someone isn’t great at managing their money or handling debts. However, a bad credit score isn’t always that person’s fault. Certain events can lead to missed payments and unpaid bills that are out of that person’s control, and therefore there are some lenders, which you can find via brokers such as Money Nest, who will offer mortgages to those with poor credit history. Remember that a bad credit mortgage might leave you with slightly higher rates, but it could be the best option if you can’t build your credit enough in the foreseeable future.
Start Searching For A Property
Once you’ve been given a mortgage in principle, which is essentially an offer from your lender to loan you a specific amount of money to buy a property, then it’s time you start searching for somewhere to buy. You’ll want to begin with identifying where you want to live. Base these decisions on whether you like the look of an area and local amenities, transport links, schools if you have children, and the neighbourhood’s general reputation. Once you’ve found an area that meets your needs, you can
search for specific properties. Consider making a list of wants and needs for a property, but then also consider the things that you could install yourself via renovation projects if there are some things that the property lacks.
Make Some Offers
You’ll then likely start to find some properties that you like, and now you might want to make some offers. The housing market continues to soar, with property demand rising, which means you’ll face more competition. Now, it is important not to set your sights on one house more than ever. There are many amazing properties, and there’s a strong possibility you will be in for some disappointment after making some offers. However, patience and dedication are key here. Don’t give up and keep searching. Don’t forget that you should only pay what you’re willing to pay for a property and consider offering the most you can afford so that you don’t get into a stressful bidding war.