Getting on the property ladder in 2020 isn’t as easy as it used to be. Long gone are the days where you can buy a house for what seems like a nominal sum in today’s money and know it worth upwards of £100,000 when the time comes to sell it. But if the time for renting has passed for you and putting down roots and buying your own family home is on the cards, then what do you need to know before starting your property search?
Are your finances in order?
You stand a much better chance of getting approved for a mortgage if you have paid off your debts and are exhibiting careful spending. You want to be able to prove you can afford to repay the mortgage over the mortgage term. Reduce your debt levels, limit your expenses, and get our finances in order. This will put you in a better position to get approved.
Do you have a deposit?
100% mortgages are few and far between, and most people are advised to look at putting down a 10% deposit. The amount of your mortgage is usually a maximum of 5 times your salary or joint salary. Lenders typically will not want more than 28% of your gross income to go on mortgage repayments. The higher your deposit, the lower your mortgage will need to be, and the higher your chances of being accepted will be.
Are you ready for the commitment?
Buying your home as opposed to renting can be a significant change. You will be in charge of any repairs or property maintenance and keeping the building in a good state of repair. So along with making sure you can comfortably afford the repayments, you will need to make sure you can afford any work that needs to be carried out.
This includes any property renovations. If you have found an ideal home in mind, but you need to make substantial alterations, e.g., a kitchen or multi-story extension. Then hiring a company such as Scenario Architecture can help you make sure your plans will stand a better chance of being approved by the local council.
Are you aware of the other costs associated with buying your first home?
The mortgage payments typically don’t cover any fees you will need to pay when it comes to buying your own home. These will need to be paid for by you and upfront. Valuation fees, solicitor fees, surveyors fees, legal fees, estate agents, removal costs, and electronic transfer fees are all fees that come with buying your own home. All of these fees need to be paid upfront before the mortgage is finalized, and you signed on the dotted line.
If you don’t have the extra money to cover this, it may be worth waiting a little while longer to make sure you have enough to help you put down a reasonable deposit and include all fees without borrowing more money to complete the purchase.