Buying a house, especially for the first time, can be very daunting (borderline terrifying), but there are a few ways you can jump past this frightening and stressful step to truly feel good about purchasing your new home. For one, it’s always better to be 100% aware of how the process works, and secondly, there are a few things you need to ask yourself before calling up real estate agents and contacting your bank. Scroll down to find a solid checklist of questions that are worth noting down:
Can I really afford it?
Before you commit your time to visiting houses, making plans to redecorate the kitchen floor or even spend hours browsing through Rightmove or other property websites, you need to be 100% convinced that buying a house is the right step for you. Remember that this is a huge commitment that will most likely have an immense impact on your lifestyle, mainly regarding your finances (such as your weekly sushi takeaway or daily croissants + coffee purchase).
But the most important question to ask yourself is without a doubt “can I afford to buy a home?”. Turns out that as dreamy as it sounds to own your own house and making it as cosy and personal to your liking, the whole money thing can become a huge longterm burden for you, as well as for your family. A good rule of thumb to follow is that no more than 35% of post-tax income should go towards your mortgage payments.
Remember that you’ll need to put a deposit down if you fall in love with a home, meaning you’ll need to have cash/money in your bank upfront even before you make the buy *official*. One of the most popular options for that is to either to dig into your savings account, or ask relatives for a little help – but if neither of those options sounds doable to you, maybe it’s time to save up?
What is my budget?
Again, before you call up any agents or start your research, you need to be crystal clear about your budget, and how much you can afford to put into your mortgage. You don’t want to be wasting your time and your agents’ by visiting houses that are beyond what you can afford. Not only will it bring you false hope (we’ve all been there), but it can also be an absolute waste of time for both sides (and honestly not worth the stress).
Don’t forget that there are always hidden costs when buying a property, so always make sure you visit places that are slightly under your budget and leave a little wiggle room to either make an offer or stay safe. Be strong and say no to properties that are way above your budget – there really is no point as you’ll either end up having to borrow more money or be rejected by the bank which is never a pleasant feeling.
What mortgage is right for me?
There are honestly thousands of different mortgages you could get. For most people, the more popular option is the repayment mortgage, which means you pay back a certain amount of money each month and can easily keep track of how much you still owe. The only issue with that option is that if the interests fall, you might end up paying more than you previously thought, but you can still give yourself a clear target of 3-5 years to pay off your mortgage and will be free of charge once the contract comes to term and you have paid everything back.
Another somewhat popular mortgage is the tracker mortgage, which directly goes up and down based on the Bank of England rates. For example, if you have a tracker that is based on 2% higher than the Bank of England’s base rate, your interest will always be 2% above Bank of England’s. This method is great, because it gives you complete transparency about your rates and you’re able to check Bank of England’s rates to understand yours. The cons are mostly due to the uncertainty of the Bank of England’s base rate. If you have a tight budget, I would not recommend picking that option.
What is my next move?
And finally, once all the complex details of payments and money are figured out, you can start looking! From experience, we recommend you visit the areas you like, walk around and get a feel for the neighbourhoods to narrow down the postcode where you would imagine living in your dream home. Bear in mind this might take a while! So get ready for late nights of scrolling through properties – it’s an endearing process nonetheless.
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