Are you thinking about getting on the property ladder? Struggling to save for a deposit to buy your own home? Our help and advice can help make renting a thing of the past.
Studies have shown that a typical tenant can spend around a third of their monthly salary on rent. This, added to the widening gap between the amount paid to a landlord compared to what could be paying for a mortgage and high rental payments, means renters have little left to build up a lump sum towards buying their own home.
There is light at the end of the tunnel for those struggling to get on to the property ladder. Follow our advice to help you get that little bit closer to buying your own home.
- Consider your deposit - The first step in purchasing a property is knowing the amount you will need for a deposit and the associated costs of purchasing a house. A property on the market for £100,000 will require a minimum deposit of five per cent (£5,000). There will be other costs to bear including valuation, surveying, brokering, conveyancing and land registry fees.
- Start saving - Being more frugal and informed on your choice of service providers and slightly adjusting your lifestyle can lead to significant savings. Creating spreadsheets or monitoring your spending with an app can help you identify areas where you can cut costs. Set yourself targets of savings each month as well as for the year. In practice boosting your savings can be achieved by making small changes such as cutting down on takeaway food and coffees. It may seem insignificant but these things add up.
- Research available support - There are several government initiatives designed to offer people help onto the property ladder. Investigate whether you are eligible for shared ownership, help to buy and local council offered housing schemes. You can find out more about your eligibility for Government schemes by visiting the Shared Ownership website.
- Get to know your credit score - Your credit score is critical in whether you are accepted or declined for a mortgage. There are many online resources where you can obtain and monitor your current credit rating. To ensure yours is in good shape make all repayments in time, settle any outstanding debts at least six months prior to submitting your mortgage application and think carefully about what outgoings you commit to at the time of applying. This will help in assessing affordability.
- Get independent mortgage advice - Buying a home is one of the biggest financial commitments you will make and getting advice and understanding what you are committing to is recommended. The mortgage market is extensive and we always recommend speaking to an independent mortgage broker. Everyone has different circumstances and a variable or fixed range mortgage may be suitable for you. There are many free online tools and calculators which can help to guide you on what you can afford and investigate interest rates. Shopping around for mortgages can save thousands and the more research you carry out the better.
- Think about value for money - When looking for what property is in range consider looking at areas a little bit further out of major cities or choosing to buy in up-and-coming areas to ensure you get more for your money. Areas undergoing major regeneration and infrastructural investment offer buyers a comparatively cheaper alternative to more traditional locations.
- Leasehold v Freehold - When buying a property you need to be aware of the difference between buying leasehold vs freehold. Flats or apartments are almost always leasehold which means you don't own any of the land it stands on or the bricks and mortar of your property. This means that you are subject to lease renewal fees payable to the freeholder. If the lease is less than 90 years, you may have trouble reselling the property if you buy it and when looking at property understanding this is advisable.
At Wigwam Homes we pride ourselves on providing friendly and solid advice on all aspects of securing your next property. To speak to us call 01482 50 51 52 today or get in touch.