Buying your first house is a major life milestone, and depending on whether you have help or not getting the deposit together to buy your first home, it can be somewhat tricky to do. After renting, you will most likely come to the realization that you want to own your own home. Renting is great as a stop-gap while you think about what you want from a home of your own, but soon enough you will realize that you pay more money than you need to every month - sometimes more than what a mortgage would be, and so, renting doesn’t always make financial sense.
When you add all these things together, you realize that owning your own home is going to make more financial sense for you than renting. Buying a house has become tough difficult, and pre-planning is key. It's a big decision so corners cannot be cut and everything needs to be done right. Some people may have family and friends around them that can help, this will certainly take some pressure off and make it easier, but not everyone has these types of resources available to them.
Thinking about buying your first house? Here are five things to consider.
A great place to start before buying your house is to work out all the costs of buying the house you want. There's more to buying a house than just the cost of the house. You'll need to factor in moving expenses, utilities for your new home, insurance costs as well as mortgage fees and anything you need to
renovate or add extras when you move in, such as furniture for example.
2. Save For Your Deposit
This might come as standard to some but you will need to have saved up enough money to put a deposit down on the house. This can be the hardest and most time-consuming part of saving for a new home, actually getting the funds to buy it in the first place. You will need to save as much as you can - usually up to 20% of the overall value of the house you are buying. Set yourself reasonable expectations for this and make sure the savings you are putting away are affordable for you.
3. What Type of Mortgage Can You Afford?
Checking affordability before committing to a mortgage is an important step to take. You need to know how much it will be per month and what deposit you would need to get the rates you want. The best way to do this is by using a mortgage calculator like
Mortgagecalculator.org. This will allow you too put in the housing costs you want, what deposit you can put down, and how long you want to pay it off. It will then calculate your monthly mortgage costs for you. This will allow you to know what you will be paying each month so that you can determine whether it’s affordable for you.
4. Check Your Credit Score
The last thing you want to do is to have planned everything and then go and apply for the mortgage only to get declined because your credit score is too low. Not everyone knows to check their
credit score, but it is an important step to take as you will get an idea of mortgage and interest rates. Depending on the credit score tool you use, it will also give you a list of things you are doing well and in relationship to your credit score, as well as areas in which you can improve. If your credit score is lower than you thought and you are unable to get a mortgage right now, don’t panic. Instead, focus on improving your credit score - you might finding speaking to a mortgage advisor or a financial advisor helpful in this instance.
5. Find a Property
If everything is going to plan financially, you can then start to look for your new property. There are many apps and websites that can help you to find properties, they will allow you to search via the amounts you want to pay and the area you want to live in, as well as via house size and specific features, such as number of bedrooms and bathrooms. You might find apps such as Zillow helpful to look at. Finding the property is just the first step though, so make sure you research the area, visit it in the day and night to get an idea of what that area is like to make sure it’s a good fit for you and your needs.
Also make sure to arrange a few viewings of the properties you are interested in, ask the right questions while there, and make notes about things in the property that might help you knock the price down or that you might want to change and work on if you go onto buy it. Asking questions and getting the right facts about the property is crucial, to ensure that it’s a sound investment and is right for you.
Buying your first home is a landmark step in life, and getting the process right is crucial. Hopefully, the tips above have given you all of the insight that you need to make buying your first home a little easier.
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