There are few more life-altering experiences than buying your first home. Whether you opt for a flat or a house, it’s a hugely significant purchase as it will set the scene for the beginning of your new independent life.
As a first time buyer, you’ll be impatient to get on and start enjoying your new place. You will therefore naturally want the purchase process to run as smoothly as possible; and, as anyone who has been through it will tell you, buying your first property can often be as exhausting as it is exhilarating. However, the good news is that it doesn’t need to be. To help ease the pressure, MYJAR has put together a list of the 5 essential points to keep in mind when you decide to climb the first rung of the property ladder.
Plan Your Finances Well in Advance
Forward thinking is the golden ticket to a successful and stress-free first time buying experience. Remember that your deposit will be at least 5% of the cost of your desired property, if not significantly more. Include savings for this deposit in your monthly budget for at least a year before you plan to purchase. The more you can save beforehand, the cheaper your mortgage will be and the more quickly you will be able to own your home outright.
Be Realistic About the Monthly Mortgage Payments You Can Afford
Taking on an overly heavy repayment plan will affect you and your finances negatively in the long term. You want to be able to make the most of life in your new home, and you will not be able to do this if all you can afford every month are your mortgage repayments and your bills.
Look Into First Time Buyer Schemes
The government provides help for first time buyers. An example would be shared ownership schemes, which involve buying a share of the property and paying rent on the rest. If your budget only allows you to pay a small deposit, there is also the Help to Buy scheme, which comprises either an equity loan or a mortgage guarantee. Find out more about the government assistance available to first time buyers here.
Consider Getting a Guarantor
If you are keen to purchase your first home but are finding it difficult to secure a mortgage, a guarantor can help. A guarantor is a person who you trust (and that trusts you!) such as a close relative who agrees to take financial responsibility for your mortgage payments if you find you cannot pay them yourself.
Take Into Account the Additional Costs of Buying a Property
These can really add up, and you’ll need to budget carefully for them. Some examples of additional costs include lawyer’s fees, stamp duty, and the costs of doing up your home to your taste. If you find you need to make small but essential purchases that don’t quite fit into your budget, a quick loan from MYJAR could be a good option for you.
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk