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Buying your first home is one of the biggest financial decisions you will ever make. Unsurprisingly, it can be a stressful time – but it is also very exciting. Many people feel that they are unable to get onto the property ladder due to rising house prices and all of the expenses involved – but don’t automatically assume that you cannot get your first property.
Here’s a guide to the steps you need to take to determine whether you are ready, as well as information on getting the financing you need to buy your property.
Steps to Take to Determine if You Are Ready to Buy
First of all, you have to decide whether you are really in the right situation to buy a property, and this is a something that you need to determine before you read any good house buying guide.
One of the initial factors to consider is your employment situation. Are you currently in a steady job? If so, your chances of getting a mortgage will normally be increased. If you are not in a steady job or you are self-employed, getting a mortgage may be more difficult.
You should also work out whether you will be able to afford mortgage repayments, and you may want to use a mortgage calculator for this. Remember that interest rates are currently at historic lows, but they will soon rise, and your repayments are therefore likely to go up as well. You need to be confident you can afford your repayments now and in the future, and this means preparing a budget.
Do you have a good credit history? If not, this could go against you. One simple way to build credit is to take out a credit card, use it regularly and then pay back the balance each month.
You may also want to keep an eye on the housing market in your local area. Predicting whether house prices will go up or down can be very difficult, and don’t be too influenced by headlines regarding house prices because it all depends on the area where you will buy. A better idea is to get some advice from a local specialist.
Perhaps the biggest question, however, is whether you can afford the deposit. The bigger the deposit you can get together, the better the mortgage you are likely to get. Capital Construction Contracting Inc urges you to remember that there are other costs involved when you buy a home, including stamp duty, moving costs, renovations, the cost of a survey, the mortgage arrangement fee and more.
Fortunately, if you are having trouble saving up a deposit, there are some schemes available to help you.
Various Options for Financing
You should always try to save up as much as you can for your deposit, and you will typically need a deposit of between 5 percent and 20 percent of the value of your property. If you do not think you can save much, various government-backed schemes may help you to get onto the housing ladder sooner.
One of the newest options is the Help to Buy Isa, as reported here. This gives you a bonus of £50 for every £200 that you save for your deposit in the Isa, with a cap of £3,000. You can take advantage of this as long as you are using the deposit for your main residence. However, it may take a few years before you can get access to the full bonus.
Another scheme that you may be interested in is the Help to Buy scheme. Using this scheme, you may be able to buy a property with a deposit as small as 5 percent through equity loans and mortgage guarantees provided by the government. You may be able to use this to buy a home valued up to £600,000 in England (or £400,000 in Scotland and £300,000 in Wales).
These are not the only schemes available, and you can read about more schemes at the Money Advice Service, so take a look and see if one could be a solution for you.
Fulfill Your Dream of Buying Your Own Home
Buying your own property can seem difficult, but that does not mean it is impossible. If you decide that you are in a position where you could potentially buy a house but you lack the deposit, research the schemes available to see if one could be right for you. There is no need to go broke when you buy your first home, so look at the opportunities available and see if you can get on the property ladder.
Michael C. Adams is a financial advisor. He enjoys writing about his money insights on the web. His articles appear mainly on investing and finance websites.
