One of the most exciting (not to mention stressful) times in anyone’s life is getting on the property ladder for the first time. Not only do you have to find a deposit, find your ideal home and secure a mortgage, but you also have to arrange removals and deal with the transition to a completely different way of living. If you’re looking to make the jump but you don’t know where to begin, here’s our handy guide to the basics.
Understand Your Budget
The first thing to think about is how much money you’ll be able to pay towards a mortgage each month. It’s important to give yourself a little bit of leeway on this, as interest rates can and probably will change during the lifetime of your mortgage. Always err on the side of caution and set your maximum a little lower than you can really manage.
Look at how much money you have saved and compare it to the expected deposit for a home of the size you want in your chosen area. If you have just enough, then you may find you have to raise a little more in order to cover mortgage set up fees, legal fees and surveying costs.
If you find you have a decent sized deposit, then why not consider using some of it for renovation works? This way, you can get much more house for your money. This can be a good thing to consider if you’d like some extra land, or if you want to really make your mark on a house.
The extras can run into thousands of pounds, so it’s important to cover all bases when looking at what you can afford. Check up on mortgage fees, legal costs, how much it’d be for a survey and the price of hiring a removals van or company.
If you don’t quite have enough cash in your savings to cover both a deposit and the moderate extras, then you may want to borrow to make up the difference. Getting a loan of between £1,000 and £5,000 can be done with a guarantor loan – and as this is an installment loan payable over 1 to 5 years, you can also improve your credit rating while you pay it back.
List Your Wants and Needs
You should consider exactly what you want from a home in order to budget properly, and according to many property gurus, location is the first, second and third thing you should consider. While this is important to a degree, try not to restrict yourself to too small an area, as you may discover it’s hard to find the house you want.
Think carefully about how many people will be living in your home and consider the amount of bedrooms and general space you’ll need. Are you planning to start a family or expand an existing one? Will someone in your family be moving out in the not too distant future? Will you be having guests to stay frequently? These are all factors that need to be thought about.
The amount of land you get with a property can vary hugely within your price range, so think about the pros and cons of having a lot of room outdoors. If you have or are planning to have children, having some outdoor space might be brilliant. However, if you don’t think you’ll spend a lot of time outdoors, a more manageable garden may be best.
If you have children then proximity to a good school is something you have probably already considered. When looking at a home you love, it’s important to take a step back and think about actually living there. Where is the nearest shop, for example?
Obtain A Mortgage
Before looking into getting a mortgage, you should first check your credit rating. In order to ensure you have the best possible chance of being approved for the mortgage you want, you should try to build a good credit rating first. This can be done by borrowing money and paying it back in full and on time. Guarantor loans have become a more manageable solution for those who would usually turn to short term, higher interest borrowing.
If you’ve banked in the same place for years, then it may be wise to try here first when looking for a mortgage. As they’ll have a better idea of your financial history, you may be more likely to pass the initial tests.
If you’re finding it overwhelming or you’re not sure your bank will lend to you, you could try a mortgage broker. They will look at numerous mortgage providers on your behalf, taking the stress out of finding what you need. They will require a fee, however, and this may result in you paying a little more for your mortgage overall.
Search For Your Ideal Home
Now that it’s time to look for your ideal home, you may want to start with your local estate agents. They can look at the homes in their inventory and compare them to your budget and your needs, taking a lot of the work out of it for you.
Using websites which list homes for sale in your chosen area, such as Zoopla or Rightmove, can be a good way of catching properties right when they first come on the market. Property finding apps can send notifications to your phone when something comes on the market which successfully fits your criteria. This is good for popular areas, where being quick off the mark is essential to succeed.
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