One of the most important decisions that a person will make in their lifetime is the decision to get onto the property ladder.
The current ever-growing property prices can be intimidating and quite frankly, just plain scary, but if the proper precautions are taken it is well worth it and will without a doubt outclass any other kind of investment that you could make. At Galliard Homes, we want to help you to get on the property ladder so you can secure yourself a first home and see the rewards and benefits of your first big investment in years to come.
Tip One: Save, Save and Save
It may seem self-explanatory, but it is so important to keep an eye on your monthly expenditure because you might be surprised how much damage that daily cappuccino from the coffee shop and harmless shopping spree can cause on your bank balance. Of course it is important to treat yourself every once in a while, but if you are serious about saving up for your first place you must be prepared to make some sacrifices.
Assessing your living situation when saving for your first home is also something to consider; if you have the option to stay temporarily with your parents or even friends until you have saved a sufficient amount, definitely take up the opportunity.
Finally, it is crucial to be honest with yourself and set realistic goals for what you could save up for and pay on a monthly basis if you eventually do secure a home because if you bag yourself a nice home but are having trouble paying your bills and making ends meet, then you will not be able to enjoy it the way you should.
Tip Two: Browse Around
In order to aid you with saving for your deposit and your mortgage, there are various ISA and savings accounts to look out for; you must do your research and work out which one has the best rate for you. Also, take advantage of government schemes that are available to help you get that leg up on the property ladder, such as the Help to Buy: Equity loan which is just perfect for first-time buyers with a lower deposit.
Find out more about Help to Buy here.
Do not be afraid to seek out the advice of a financial advisor if you are not sure where to start or which government scheme is right for you. This is a highly worthwhile move to make because then you can be 100% sure about each financial decision you make.
Tip Three: Be Aware of Extra Costs
When you are exposed to your first taste of first-time buyer life, you may not be aware of some of the extra costs.. It is vital that you are made aware of every expense that could be thrown your way so that you are financially prepared to tackle it. Sarah Lord, a financial planner from Killik & Co, says: ‘Legal fees are often forgotten in the deposit calculations, which can lead to a bit of last-minute panic. First-time buyers need to factor in these charges when they are saving.’
Other payments that need to be considered are possible repairs or refurbishments that might need to be made in your new property, as well as moving costs and valuation fees.
Tip Four: Ensure That Your Credit Record is Clean
A decent credit record is essential for first-time buyers because credit reference agencies will more often than not check to see whether you have any unresolved debts that need to be repaid. So, make sure to evaluate your credit records in advance when applying for a mortgage as it could hinder your chances of acquiring a loan if you do not.
Tip Five: Shared Ownership
Different housing associations offer shared ownership schemes where purchasers can buy from 25% up to 75% of the price of a property, and pay rent on the outstanding share. This is a popular option amongst first-time buyers who are finding it difficult to stretch their finances, plus purchasers can choose to grow their stake of ownership overtime, until they potentially have complete ownership.
Tip Six: Joint Mortgages and Guarantors
If you are planning to climb the housing ladder with a friend or partner, you will have more scope of what you can buy as opposed to buying somewhere alone as you will be eligible for a larger loan, which consequently means that you could opt for a larger house. A joint mortgage brings an abundance of advantages to the table as various expenses, such as bills and other legal costs are split between you and in the long run, it can work out cheaper than if you were to rent a property. If you are entering into joint ownership, you'll need to decide whether you will be joint tenants or tenants in common. Check out our guide to find out more information.
However, be mindful about applying for a joint mortgage if it is with somebody that you are not completely sure about because it could cause some potential future difficulties in terms of paying bills on time, and even collateral issues.
Guarantor mortgages are also something to consider and is a popular options amongst first-time buyers. According to Affordable Home Advice: ‘With first-time buyers increasingly struggling to get on the housing ladder, would be buyers are turning to the bank of mum and dad to help give them a helping hand. Guarantor mortgages are a great idea if you have parents or a close family member that is willing to act as a guarantor for your mortgage and take responsibility for any repayments you may miss.’ Some banks can even permit up to four parties on a guarantor loan which is a great path to take if family members are willing to support you on your journey up the property ladder.
Obviously, there are a plethora of things to consider before diving into the property market for the first time, but with proper decision-making and the deliberation of various options available, you can begin your trek up the housing ladder and experience the rewards and excitement that you deserve.
