Do you want to buy a house? Here’s how to get started

Many people love the idea of buying a property, but they don’t think they can, so they don’t try, meaning they continue to rent instead. While renting certainly has its benefits, the idea of owning a property is important to lots of people, with buying their own home high on their list of goals. If you are one of them, then this article will be of interest to you; there are different ways that you can eventually purchase your own place, even if you don’t think you can right now.

Getting The Deposit

For a lot of people, especially first time buyers, it’s the initial deposit that is the biggest obstacle in the way of buying an apartment or house. Even if you meet all of the other criteria, without this amount of money available, it is unlikely that you will be able to progress in your mortgage application. The deposit on the property can be as much as 20% of the overall purchase price, which means that it can add up to many tens of thousands of pounds.

However, there are ways that this deposit can be dealt with. Firstly, the 20% figure may not be concrete. If you speak to your estate agent, you may be able to strike a deal, especially if the current owner of the house you want is keen to move, or the property has been on the market for a long time. Remember, though, that the less you pay on your deposit, the more you will pay on your mortgage. This figure will need to be taken into account when you calculate your monthly outgoings.

If nothing can be done on the price of the down payment, then you will need to save for it. Start as soon as you can and even if you have to live frugally for a few years, once you have that deposit, you can buy your own place and enjoy it.

Poor Credit

Apart from the deposit, the biggest issue many people face when applying for a mortgage is bad credit. A mortgage is a big loan from a bank or other lender that is specifically used to buy property. Although the interest rates on a mortgage tend to be a lot lower than on other kinds of loans, the amount of money means that lenders are wary of giving them out too freely. There will be stringent checks carried out to ensure you can pay the money back, and if you have had credit problems in the past, this can be a red flag to lenders.

The best thing you can do if it’s your credit that’s holding you back is to fix it as quickly as you can. It may still take years, but in the meantime, you can save up for the initial deposit and work on getting a good job or even a promotion in your current one to ensure you can pay your mortgage when the time comes.

There are various different ways to fix your credit. You can get a loan to consolidate your debts, for example, and this makes paying them off a lot simpler (and often cheaper). Alternatively, you could transfer your credit card balance onto a new card. However, if you have bad credit, it can be hard to obtain such a card, but there are credit cards specifically for people with credit problems; you can learn more here. Remember not to take on any additional debt when you’re trying to fix your credit, and always pay off more than the minimum if you possibly can.

Small Budget

Knowing your budget for a property is essential so that you don’t start looking in the wrong places for your dream home. It can be disappointing to discover that you can’t afford as much as you had hoped, but it is better to know that up front, rather than to fall in love with a property that is out of your price range.

Never try to increase your budget if it is going to cause you problems with repayment of the mortgage, or leave you short of money to repay other debts, or pay household bills. Even if you can’t increase your budget, there are ways to ensure you still find the ideal house for you. Make a list of everything you must have, and another list of all the things it would be nice to have. The first list is the most important, but if you can find a place with aspects of the second list as well and it fits within your budget, that’s even better. Compromise is the key when it comes to finding your own property to buy.

Fear

Even if everything is in place and your budget works out, you have the deposit, and your credit is good, it can still be daunting to actually apply for a mortgage and buy a house of your own. You will be taking on a huge amount of debt, and it is a big commitment that will last for at least 25 to 30 years. This can put many people off. However, when you compare it to renting over the same amount of time, which is what you would most likely be doing if you don’t buy a property, you can see that you would still be paying out a lot of money, yet have nothing to own at the end of that time. With mortgage payments and rents being fairly similar in price, it makes sense to buy if you can and have a good investment for your retirement.

If nothing else, remember that rents will never go down, but mortgage payments can depending on the interest rate (plus you can always re-negotiate after the initial term). You could even save money in the long term.

You can see that owning a property is not as scary as you might first have thought as long as you have taken care to do enough research before you make a start.