Buying a home can feel like a minefield and daunting so we have put together some quick tips to help you when you decide to buy a new home!
Buy for the long term
Buying a home is a significant investment! The properties you look at should be ideal for the investment plan you have in mind. Look at properties that are suitably equipped with the features and space you need now and for the future. Jumping from house to house can end up been very costly with all the extra fees you have to pay, such as the solicitors and agency fees.
Buy to improve your life not just for money
Your home should be more than just an investment. It is where you spend a lot of your time, where you sleep, where you bring up your children, and much more. The housing market is pretty unpredictable at the moment so don’t buy your home purely for money purposes. It is likely you will be in the property for a few years so finding a home that meets all your needs should be your priority first. Buying a property that appreciates in value is a smart move, but it's smart to get one that helps you build your life too.
Keep focus on whats important
The housing market fluctuates and there are points where there are fewer homes on the market, making finding the right home for you more of a challenge. Remember, it is important to keep focus on finding a home that is affordable and meets your needs. It can be easy to get distracted by fancy features in a house that may break your budget. These features tend to drive up a properties price tag and may not even add much value to you once the initial enjoyment wears off. It is best to make a needs list for what you desire in a home prior to viewing any potential homes.
Set a budget
Set yourself a budget early, again do this before you look at potential homes, just like your needs list. In today’s property market it is very easy to go over budget, one of the biggest causes of this is location. There is nothing wrong with getting a great location, with good schools, and short commutes, but you need to be realistic about your budget and about yourself. Know what you're willing to compromise on, whether it is size, location, style, or state of property.
Aim for a healthy deposit
The bigger the deposit the better! Buyers who put more down upfront typically make fewer offers and it also reduces their financial risk. The last thing you want to do is owe more money than your house is worth, especially when there are risks of the market dipping. There are mortgages out there that only need a 5% deposit but if you can bide your time and it is feasible then it could be worth waiting until you have saved more.
Keep some money in reserve
It is important to not just save for your deposit but for any extra expenses too. Ideally keep this reserve money separate from your normal bank account and the deposit you have. This reserve is there to be a cushion for a few months should something unexpected happen, such as losing your job. Having a reserve ready will hopefully save you from major financial issues and give you peace of mind.
Pre-approval and a fixed rate mortgage
To get pre-approved you need to organise all your paperwork, you need to show proof of your income, any debts, and your credit score. You then need to do your research and understand all the mortgage options open to you. Take your time at this point and make sure you know all you need, or instruct an independent mortgage advisor to help you. By getting your pre-approval in place buyers then know you are serious about buying and have the funds ready in place. It also helps you to know and understand what you can afford.
There is a range of mortgages available in the market today so make sure you look over them all to see which one works best for you. A 30 year or 15 year fixed rate mortgage can have there advantages, it is handy to know your rate isn’t going to change for the whole time you have the mortgage. This does mean you don’t get the lower rates when they drop but it also means you don’t get the inflated rates either. A fixed rate mortgage tends to have a lower rate anyway but the monthly payments tend to be higher since you have less time to pay it off. Having a conventional fixed rate mortgage helps you manage your monthly budget as you know exactly what you will be paying each month for the length of the mortgage. It is best to get one while the rates are low!
Finally, this type of mortgage doesn’t tempt you with a low initial payment! You don’t want to buy a house that is more then you can afford.
Compare or get help!
Generally, buying a home is one of the biggest purchases most people make, but even knowing this people still don’t tend to their research on mortgages. You could save thousands of pounds just by having a slightly lower rate throughout the length of the mortgage period. By looking into all of your options, or getting an independent mortgage advisor onboard you should be able to find a lender that meets all your needs. You want a lender that caters to your specific needs, has the most competitive rates, and has a history of closing on time.
Be willing to walk away
Buying a house is stressful and can take up a lot of your time, but when you do finally find the right home it is all worth it. However, you need to manage your expectations, the right home that meets your needs in the right price range might not immediately be available. You need to be ready to walk away from a house if it doesn’t meet all your needs, its quite a bit over budget, or the seller won’t accept your offer. Also if the survey throws some big flags up you need to really consider if the property is right for you, and your budget. By having your list of needs you made earlier this should help when deciding whether to make an offer or not. Stick to your list, don’t go above what is affordable, and don’t just settle either, the right property will be out there!
For more tips and advice visit our blog: