If you’re not living in your own home yet, that probably means one of two things.
- You’re still living with your parents.
- You are living in rented property.
While there is nothing wrong with either of these things, there are certain issues you need to consider
Your parents might cook your meals and do your laundry, but you may still feel inhibited in your life when you are living under their roof
And while renting may be the best option for you at the moment, you won’t fully be able to call the place you live ‘your home’ as there will be restrictions
If you want more freedom and stability in your life, buying a home could be considered a necessity.
To help you, here are some financial tips we think you will find useful
Start saving your money
To get a mortgage, you need to put down at least 5% as a downpayment; otherwise, the bank will refuse your application
If you ever considered saving money as an afterthought, now is the time to make it a necessity. Set up a savings account at a bank that offers you the best interest rate, or get a boost to your mortgage savings by putting your money into a government-funded Help To Buy ISA
Look for ways to make savings in your daily life too, and stop spending any spare cash you have on anything you don’t need.
Show the bank you’re responsible
When applying for a mortgage, the bank will want to know that you are responsible
If they perceive you as a risk, they may turn your application for a mortgage down, or they might hike up the fees
Therefore, make it your priority to pay off any debts you currently owe and take steps to improve your credit score. The bank should then offer you a better mortgage deal
Shop around for a mortgage
While you are at the mercy of the bank when it comes to getting a mortgage in the first place, you don’t need to take up the first offer you receive
Shop around the banks in your area, factoring in all the fees and charges that are part and parcel of the mortgage deal
As with many types of loan, these hidden costs mean the process of choosing isn’t straightforward
Speak to bank advisors, ask them to lay out every cost involved, and then use a mortgage affordability calculator to find out what you can comfortably avoid.
Check out house prices
Check out property websites and real-estate windows to get an idea of the latest house prices
Because of the hidden costs (which we will come to in a moment), as well as your mortgage, you need to consider your budget
Only look at properties that you know you will be able to afford, and curb the temptation to look at any houses that you know are beyond your means
It can be easy to let your heart rule your head when choosing where to live, but because of the huge expense of buying a house, you do need to have your thinking cap on to make a sensible decision.
Factor in expected and unexpected costs
You may have the money for a deposit, and you might have seen a house that reflects your budget
But there are all the others costs to consider, such as estate agent, surveyor, and solicitor fees
You have taxes to consider, removal firms prices, and building and contents insurance
There is the cost of furniture and appliances to think about too, as well as all the usual expenses that come with running a home
There is a lot to consider, but it’s in your best interest to sit down and weigh up all the costs before choosing a property.
Look for ways to save money on house costs
You can save money by shopping around for a mortgage
You can also save money on furniture and appliances, by using second-hand stores both online and on the high street
By using price comparison services, you can save money on insurance and utility costs. And you can save money on removal services, by asking friends and family to help you with the move
There are all kinds of ways you can save money, so while there will be a hit to your bank balance, you can still be money-savvy when you are considering the expenses involved
Put money aside
When calculating costs, don’t let every penny you earn dictate your decisions
You still need to put money aside for any emergencies that may arise, such as a big bill or any repair costs that come with the house
Therefore, factor in an emergency fund when you’re working out what you can afford; otherwise, you may be forced into securing extra credit to help you get out of a jam, and that will only add to your financial stress in the long term.
Get professional advice
Navigating the house buying process is difficult, particularly because of the many expenses that will befall you
It can be easy to become overwhelmed, so finding help where you can is critical
An account or a financial advisor will be able to help you budget and manage your finances
A good estate agent will help you find a good deal on a house and will give you an idea of the best time to buy in the property market. And an architect will give you advice on the viability of a property and will point you to any danger signs that may result in added expenses later on
Of course, you might also speak to experienced family and friends as well, be that for financial or practical matters when you’re navigating the house buying maze
Buying a house is both stressful and expensive, especially when you’re making the first step onto the property ladder
However, despite the personal and financial costs involved, it is worth making the move, as a house is a worthwhile investment
Follow our tips, seek advice from the professionals, and if you are planning on buying your first house soon, we wish you the very best of luck
*this is a collaborative post
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