The thought of committing your finances for the next twenty-odd years can be a terrifying prospect. But, the lure of home ownership for many is too much to bear. Owning your own home is a great way to ensure financial security. But, in a somewhat tenuous housing market, it can be difficult to know if you are making the right decision.
As a first-time buyer, you should be armed with nothing but the facts. Let’s cut through the financial jargon and give you a simplistic view of how to get on the property ladder.
Control Your Finances
The thought of cutting your spending may not be appealing. But, getting your finances in order is vital. You will need to control your spending and save as much as possible. Cut down on luxuries such as eating out and shopping sprees. Yes, this is dull. But, if you are serious about getting on the property ladder, you need to suppress the urge to spend.
Save, Save, Save
Saving is vital. You need to have at least 15% of the mortgages total worth as a deposit. While this can seem like an impossible task, it’s not unachievable. Set up a bank account that is separate from your day to day banking. Put any surplus cash into it. You can save for your home in no time at all. Bear in mind that if you want the best deals on interest rates, you need to save a total of 40% of the total mortgage value.
Prepare For Scrutiny
Your mortgage provider will be scrutinising your incomings and outgoings. Prepare for this by cutting back on luxuries. You will be asked how many dinners you go out for in a month. With this in mind, you need to prepare for this scrutiny. Your mortgage provider will want to know every little detail of your social life.
Finding the Perfect Home
Finding the perfect home can be something of an arduous task. But, there is help at hand. The UK government has launched the Help to Buy Scheme for prospective first-timers. This means that you only need 5% of the total deposit. You also have a choice of properties that are under five years old. So, buying new detached homes in Whitby has become even more affordable.
You need to bear in mind the total cost of the mortgage that you can afford and will be loaned to you. This is usually three times the annual salary of a couple. It is five times the annual salary of a single buyer. Consider having money left over for home repairs. Or, take out a cheaper mortgage so that you save money overall.
Finding the perfect mortgage lender can also be difficult. But, do remember that you are not restricted to using high street banks. Shop around with financial and independent brokers. In some instances, this can ensure that you are getting the best deals on mortgage rates. But, do ensure that you thoroughly research your mortgage provider. Check their credentials. Ensure that you are receiving the highest level of customer service possible.