Never before has it seemed harder for first-time homebuyers to get themselves on the property ladder. There was a time, many years ago now, when it was a foregone conclusion that we would marry and settle down and in doing so buy ourselves a house. Saving habits have certainly changed and today, people are generating more debt before reaching house buying age and the like but since 2008 actually getting a mortgage is a lot harder. This coupled with the ever-increasing price of housing and things start to look very bleak indeed. But people are doing it! However, sometimes a little help along the way can make things easier. Here are a few tips to help you on the way to your first home.
Keep an Open Mind
The biggest pitfall any first-time buyer hopefuls fall into is being narrow minded about location and house type. Of course, it’s OK to have a dream home in your head but be realistic. If you live in the south you have to face the fact that you may not be able to get the 2 bed maisonette you have always wanted. This is often a point where negativity comes in and people just moan about the house prices. This then effects their saving ability because they lose focus and it all falls apart. Look out for areas where prices are lower but might come up! There are a number of up and coming towns where buying now is affordable and the long term gains could be very useful.
There are a huge number of locations that are easily reachable from the south so visiting friends and family is no problem. Areas like Suffolk and down into Dorset can be very well priced. Chiltern Associates are based in Suffolk and are among a number of property experts who have mentioned this area I the past as a strong growth location.
Make sure you down load all the property apps like www.rightmove.com and spend some time exploring areas and prices. By removing the mental barriers to new areas and looking at how easy traveling to and from the area is can open up a massive range of homes that are not only affordable but are also much nicer than anything in the price range in more expensive areas.
Set Proper Savings Targets
Saving is hard, in fact it is really really hard. But it is a lot harder with no targets. By just trying to save everything you will end up saving less. Everyone needs a treat from time to time and setting proper targets will allow for this and keep you happier.
It is important to also set an end figure that will actually cover the cost of buying a home. It is not just the deposit, there are legal fees, surveys and more. Not including all the usual costs around furniture, and fixing the odd thing that will need attention; even buy light bulbs and the like. Even without stamp duty for first time buyers the real cost of buying a house after it is all finished can be as much as £7000…and that is just the buying and moving cost not the deposit.
Mortgages, Mortgage Advisors and Research
First of all, your bank is not always the first place to go to for a mortgage. Just like your existing phone company, gas supplier and TV provider are also not always offering the best deals. This is the biggest purchase you will have ever made and it takes time, research and a lot of shopping around.
Speak to people you know who have bought a house, see who they used and talk to them about it all. It is so easy just to call your bank and think that is all that’s on offer and it’s not. An independent mortgage advisor can be very useful if they are good. They can really shop around for you and often they only take commission from the lender so are free for you to use.
Equally as important as finding the right deal is knowing the different types of mortgages on the market in the first place. You need to understand what interest only means and be able to see the long term differences between that and a repayment mortgage. Do not be drawn in by the one which leads to the nicest house because it could also be the one that costs the most in the long run. By the time you realise you could have made a nice little sum on a cheaper house and moved up the ladder.
Do your research, learn all the different types of loan and get some advice from different sources.
These tips may not offer a simple answer if you are feeling totally up against it trying to buy a house but take some time out and think about them in detail. Being open to new areas, saving properly and reasonably and not taking the first bit of mortgage advice you get as gospel will empower you to get a step ahead of a lot of other people.
