Getting a home for the first time is the largest purchase you’ll make in your whole life. The first time home buyers advice can help you on the process because the method is daunting that can stress you if you are not careful. In fact, there are a lot of ideas about purchasing a home for the first time. However, the reality holds that this can be very hard for young people who want to take their first step into the property ladder.
The recent study revealed that one out of 2 prospect homeowners think that if they could not step into the property ladder, they cannot go through it any longer.
Meanwhile, according to Halifax the largest mortgage lender in Great Britain said that first time home buyers have gone down to the lowest level in twenty five years. However, there are many ways to improve the prospects by following the ten tips that could assist you purchase your first dream home.
1. Know your resources
It is necessary that you are prepared before stepping into the property ladder nowadays. Once you have read this article, you are now on your good move. First time home buyers must be knowledgeable about what’s going on about the market. Know the fixed rate, standard variable rate, and the tracker. Aside from these, you must be aware of the latest property deals, house and mortgage price news.
2. Include parent’s assistance
Your parents are available when you need help like emotional, psychological, and physical. Many young home hunter’s parents observed that the value of their home increase largely as compared to the mortgage. This could shake the whole amount of the deposit that enter into the joint mortgage or perhaps act as a guarantor.
3. Observe affordability appraisals
The traditional mortgage lenders offered 3-3½ times the salary of the borrower or maybe 2½ times of the joint earnings. However, the salaries are not just the basis in managing the mortgage repayments. Many of the parents of the first time home buyers remember the high interest rates that go up to 15%. In appreciation of a good outlook for the continued base rate of the Bank of England around 5% score – the present rate is around 4.5%. With this affordable rate, some lenders extend to borrow through the affordability measures.
4. Go out and shop around
Do not rely on banks and other building society. Go out and look for some other market products that suits your budget. Be careful of the mortgages that offer low interest and big repayment costs.
5. Balance the budget
People who don’t shop around pay more than what they need. Sit down and create a list of your car insurance cost, travel insurance, electricity bill, gas, weekly expenses, holiday expenses, and many more. Begin looking for cheaper alternatives and see how much savings you gained.
6. Allow others' money to help you
Home buying does not just involve savings. You need some help from the lenders to cover up the whole cost and help lessen your monthly payments. There are some building societies that provide family offset loans, where parents can skip their savings interest and lessen the mortgage costs of their children.
7. Combine both your wages
Young couples can combine their earnings to get the property. However, in case you haven’t found the right person or perhaps you are in a relationship but afraid of the consequences later on, there is an alternative. Teaming up with your close friend can be a fun idea. Do this by binding the contract legally, pool deposits, and then apply for the joint mortgage. This is one way to enhance your borrowing power.
8. Rent a room
If you want to use affordability to extend to a larger mortgage but concerned about the repayments, why not rent a room. In instances where the price of the house is high, rents are liable to go along with. In this case, the first time home buyer can get generous amount when it comes to cost of the mortgage.
9. Move to some other place
This is a big step to consider but you can get benefits when you move to another area. If you are living in the area where high prices occur and you’re struggling, you can transfer elsewhere. Find a place where the cost of living is affordable compared to your previous area. Once you are already on the property ladder, it will be easy for you to return later.
10. Stay calm
Stay calm and do not panic. Experts say that the rise in house prices in the previous years will not return. In the previous years, the house prices in most areas remained stable. With this, first time home buyers can find bargains at a good discount regarding asking prices. Cut down your expenses to get enough savings
Remember, owning your first dream home can be fun if you digest the above advice.