The time comes in everyone’s life that they start to think about settling down. This might come about a bit quicker if you have children; but when they’re very young, there’s nothing from stopping you moving around and maintaining a bit of freedom in your life. When choosing a good school becomes a priority on your ‘to do list’, it might be time to think about buying instead of renting. Below are a couple of basic tips on how to get started on the road to being a homeowner.
Establish a budget
The very first thing to do is establish a budget. For most people, this will be restricted by how much your bank is willing to loan you in order to buy your home. In the pre-credit crunch days, banks would simply offer you a multiple of your joint or solo salary, then do a few checks to ensure you could manage the repayments. These days, however, they are a bit more careful about how much they lend, and to whom. They will likely check your monthly spending, how long you’ve been in your current job, how likely you are to stay there in the long run, and many other factors. If you have a poor credit rating, it may be worth trying to bring that score up a bit before you think of applying, there are even credit cards for rebuilding credit that you could use to speed up the process. Once you know how much you are likely to be lent by the bank, you can work to that budget in your search for properties. Remember to factor in extra costs such as solicitor’s fees, surveyors, and any additional taxes on the purchase, like stamp-duty. A big cost that people often overlook in the early stages is the actual cost of moving in. Packing materials, removals trucks, and even taking time off work to complete your move are all important factors to consider in your budget.
When you first start looking for a home, it can be easy to get very excited during your first viewing and want to jump into making an offer. The estate agent will likely tell you that there has been a lot of interest in the property, or that many offers have been placed already and a bidding war is underway. Take all this information with a very hefty pinch of salt; it is their job to get you to spend your money after all. There is some very sound advice that is often given out when buying a used car that is particularly applicable in this scenario; don’t buy the first one you see. It can be tempting to get caught up in the moment and claim ‘love at first sight’. But buying a home is a major, long-term commitment. It should be made with the head, not the heart. Be sure to view many different properties, and be cold-blooded in how you approach each viewing. Have a list of essential criteria that you will not budge on, and remember that your budget is not a target. The less you manage to spend, the quicker you can pay off your mortgage; leaving you more money to put into a retirement plan or dream holiday.
Buying your first home can be a daunting process, but it doesn’t have to be. With careful planning and the ability to approach your purchase in a cool-headed manner, you can make taking that first step onto the property ladder one of the best experiences of your life.
This is a collaborative post.