It’s never been tougher for those who want to buy their first home. House prices across the country have soared to unprecedented levels in the past few years and the deposits needed to secure your new home have also risen. But don’t despair, there are things you can do to help you achieve your dream.
Gary Oxborough, Founder of Go2Mortgage, has put together his five top tips below to help people step onto the first rung of the property ladder. This is an advert with Go2Mortgage.
First and foremost, review your spending
Now more than ever, it’s vital that you understand exactly what your monthly outgoings are; it sounds obvious, but the less you pay out, the more you’ll have to put down on a deposit.
Many people are offended by the notion that cutting down on ‘luxuries’ like Netflix, takeaway coffees, and going out for food, would make a significant difference. However despite that, there is something to be said for reviewing your spending habits to see where your money is going.
As a matter of course, a mortgage/financial planner would need to understand the client’s regular outgoings, and that means going through their bank statements to check mortgage affordability. Review and cancel any memberships you may no longer use or can live without, such as gym subscriptions, clubs and streaming services.
Small monthly payments of five or ten pounds here and there can soon add up. Using spreadsheets to track outgoings can be incredibly useful, and putting your spending into categories can help you to reconsider areas where you may be overspending. Cutting back, or setting monthly budgets for these areas, can really help.
Give your income a boost
Whether or not you can streamline your outgoings, increasing your income can help push you further towards your goal. Consider if you have free time to take on another part-time job, even if it’s a few hours a week. There may also be the opportunity to take on overtime in your current role.
Dig out items you might be able to sell online - such as clothing, old toys, furniture, and anything that might be of value. This is an easy way to make some extra cash from the comfort of your own home… and declutter at the same time!
Pay yourself first
Make your own savings a priority by ensuring you set aside an agreed amount every month into a separate savings account as soon as you are paid. This enables you to remain disciplined and save consistently throughout the year; just remember that after you’ve transferred your savings, you have left enough to cover essential bills, plus a little extra.
Take advice about the best schemes to help you on the property ladder
Everyone knows about the Help to Buy scheme, but that is coming to an end soon, and at the moment is only available on new build properties. There are some private equivalents of Help to Buy and lenders who may offer a similar service. But be warned, these schemes may not be suitable for your own particular circumstances, and each of them has pros and cons.
With any major financial decision, it’s crucial to be fully aware of what you’re doing, and it makes sense to get professional advice before making a decision.
Consider the ‘hidden costs’
Housing prices have risen substantially in the past ten years, which makes it all the more important to get the best deposit you can to secure your property. However, there is little point in reaching your deposit goal if the home you buy means that your monthly mortgage swallows up all your cash.
Owning a home isn’t just about the mortgage cost, there are other bills such as council tax, utilities, building and contents insurance, groceries, transport, etc. before taking the plunge, you need to be sure that after your mortgage payment, you can afford these other essential outgoings.
It’s definitely challenging to get yourself in the position where you are ready to buy your first property, but with some discipline and a bit of hard work and expert guidance, it’s achievable.
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