Getting on the property ladder and buying a home is a pretty big deal. There can be many that rush into it a little, just to get on the ‘ladder,’ so to speak, as it can be seen as a big step to take. It can be seen as a sign of success or a step into adulthood when you’re a homeowner. But at the end of the day, owning a home is a huge commitment. Financially it can be a massive commitment (as some homes can quickly become money pits), as well as time and energy that is needed to keep up with them; you’re the one in charge when you own, not a landlord. So you need to make sure that if you are looking to buy, you are doing so for the right reasons, as well as having your finances looking good.
Owning a home can be a great way to invest money and when done in the right way, can be a massive benefit to you. So here are some things that first-time buyers should be thinking about, so that you can be informed and make a decision that is right for you.
The Right Timing
Like many things in life, you can’t always get the timing right on things. It may not be the ‘right’ time to have a baby, for example, but when is the right time? But when you think about it in relation to property, you do need to take a bit of a step back and assess the situation; is it right for you at this very moment? You definitely shouldn’t get on the wagon of buying a home because everyone around you is buying a home. You have to do it when it is right for you, and not just because a relative always tells you that you are throwing your money away when you rent.
There can be some swaying factors when it comes to buying a home, like low mortgage rates or the fact that you keep hearing it is a ‘buyer’s market.’ You should want to get on the property ladder because you want to get on the property ladder. You should be in a place in life where you’re ready to settle and to be in a certain place for a number of years. But importantly, it is the best idea to be in a financially stable situation, and only do it when you are ready.
As has just been mentioned, finances are really important when it comes to buying a home. For the majority of people, it is going to the priciest thing that you ever buy. And as a result, you need to think about how you are going to finance it. As a first time buyer, it is unlikely that you’ll be able to buy a home outright in cash, which is where a mortgage (in simple terms, a loan for the purpose of buying a property), comes in. You need to be able to afford the mortgage repayments, however.
For starters, looking up something like a recent house loan calculator 2018 can give you an idea of what the mortgage rates are like at the moment, and if you were to borrow a certain amount, then you can see what you will be paying back each month. So assessing what income you have and what you can afford is the first thing to look at. The lender will then assess it too, so talk about what kind of house prices you should be looking at.
As a first timer buyer, you need to be able to show the lender that you can pay back the money that they will lend to you. Which is why a good credit rating, a steady and stable job, and a cash deposit can all help. You look much more reliable and are more likely to be loaned to, than if you have very little deposit and a bad credit rating.
It seems like as a nation we are pretty obsessed with property. There are so many shows on television that are about property and property hunting, as well as apps, and websites that you can see what the house down the road is on for! So although shopping for your dream home can be a long and taxing experience, it can be really fun too. The best piece of advice is to just make sure that you know what you are looking for. If you don’t mind something that needs to be repaired, then you need to factor in a certain amount to do those repairs and renovate. That may mean looking at houses that are on for less, as you are unlikely to be lent more by the bank that what they had already indicated. So you need to be sure about what you are doing, and you need to make sure that you stick to the budget that has been set. Otherwise you could be paying for something that you can’t really afford, and that isn’t going to be a good financial decision.
Location, Location, Location
Even though you are only just looking for and moving into a home, you need to make sure that you do have the re-sale of the home in mind. Unless you plan to be there forever, then you need to think about selling it. Which comes down to a few things, which are the location, the ability to add value, and the local area. For example, if there the area is a commuting town, and there is a train station within walking distance of the home, then it is going to help the house to sell pretty much anytime, as there will always be a demand for that. So you do need to have that in mind when you’re looking for a property.
Another thing that is talked about when buying a house, is that you should look for the worst house on the best street, rather than the best house on the worst street. The reason being, if you are on a street where the other houses are worth more, it does help to hike up the price of your house a little too. If you have the biggest house on a street that isn’t that great, you may get a bargain price for it, but it will stay that way. So when it comes to reselling, it is likely to have not gone up that much in price, as some areas and environments do have a ceiling on what the properties can be worth.
Sealing the Deal
You may think that finding the property and then making an offer and having it accepted is all that you need to do. But it is a lot more complicated than that. As it is one of the biggest purchases that you will ever make, you need to make sure that it is all done in the right way. Plus, buying a home is a legal transaction, so the proper process needs to be followed (it can’t just be you and the seller swapping details and cash).
One of the things you should do if you’ve found a home you love is make more appointments to visit. There will be many things that you may not have thought to look for before. So anything from checking the parking, the council tax cand, the school catchments, the storage space, or if there is a loft, can all be a good idea. Check the doors and windows too, as they can be expensive to be replaced, as well as just the general repair of the place. If it is actually in worse repair when you take a closer look, your offer needs to reflect that as work will need to be done on it.
Once you’re sure that you want to go ahead, then it does come down to making the offer at the price that you think is fair. It may not be accepted, but you have to go in with a final figure in mind and not budge on it. Once you’ve had an offer accepted, then you just have to think about getting a survey done on the property. This, like the second and third viewings that you may have, is a third party person coming in to check the quality of the building, as well as things like the structure and if it complies with certain regulations. If it does, then the sale can carry on as normal. If it doesn’t, then you really need to think about making a counter offer, as there may be a lot of work to do, or cancelling the sale.
I hope that this guide has gone into some detail about housing and about all that needs to go into it. Finding your first home to buy can be really exciting, but you need to make sure that you’re informed, as it can be a decision that not only costs a lot, but cn end up costing more in the long run if you’re not careful.