While renting can provide you with a sort of nomadic lifestyle, a sense of freedom and a sheer lack of responsibilities, there comes a time in every human being’s life when they long for something a little more grown up. If you are in your late twenties or venturing into your early thirties, you might be keen to put down roots and break free from the monotony and conveyor belt of the rental market. Perhaps you’ve moved home every twelve months and you never stay in any locality for longer than your initial tenancy period. You might not have any furniture to call your own as you always rent fully furnished and you might now be ready to own your own sofa, TV cabinet and lawnmower.
Growing up is part of life and you can be quite surprised at just how fast the wanderlust itch is replaced by a sudden yearning to buy a house and get yourself a mortgage. To stop the cyclical nature of renting, you need to prepare for buying your first home. Take a look at this simple guide to help give you a leg up onto the housing ladder.
Sort Out Your Finances
The moment you make the decision to save up to buy a house, you need to revolutionise your finances. While you thought nothing of venturing into your overdraft once in a while or you might have forgotten the odd credit card repayment in months gone by, this now needs to be something of the past. Your finances need to be squeaky clean for at least the previous six months before you put an offer in for a pad.
Being more financially aware has its benefits. Set up a simple budget spreadsheet and monitor your income and expenditure. That means making a note of every macchiato that you have on the way to work on a Friday morning. It means trying to scrimp on eating out, and going for more budget friendly food rather than gourmet ready meals.
Check your credit rating and use the free advice section to boost your score. You may even be wise to apply for a credit card if you have never had one before simply to give you more of a credit history. Ensure that you’re registered with your local authority and that you’re on the electoral roll. This can boost your credit score immeasurably.
Your mortgage company will want to see that you’re a responsible borrower so stay in the black, live well within your means and keep the expensive new car or trip around the world for after move in day. Don’t forget that your residential conveyancing solicitor also requires fees to work on your behalf. Make sure you shop around and don’t go for the cheapest option that will result in an unnamed individual looking after your house purchase. Go for a solicitor with an excellent reputation and one that will communicate with you on a weekly basis.
You need to consider the location of your new pad. You might fancy heading to a city centre destination in the midst of it all; perhaps you want cafe culture on your doorstep, you want good food around every corner and you need decent transport links. Alternatively, this might be a chance to wave goodbye to your chaotic lifestyle and seek a retreat to the suburbs. Wherever you want to go, make sure you are purchasing in a well established area. There’s nothing worse than buying a pad in an ‘up and coming area’ only for it to be crime ridden and isolated. Instead, do some research online, have a walk around any potential area that you’re looking to buy in, and ensure that you take a look at the property prices for the previous five years. If they have been rising year on year, the chances are that you won’t ever run the risk of heading into negative equity.
You also need to consider who you are going to be living with. Do you want to live alone, with a friend or with a sibling? Make sure whoever you choose to purchase with is a trusted individual and someone that you get along with. Taking out a five year mortgage with someone you later fall out with will end up in misery for the both of you.
Saving your cash can be hard when you have a busy social calendar. However, to purchase your first home, you will need to stay indoors a little more, forget those purchases on expensive shirts and the frequent trips to the cinema. For six months, you may have to live like a pauper but it will be worth it in the end. When considering the flat or house that you buy, try and make sure that you don’t overstretch yourself. By focusing on how much you can afford to pay back each month, you can work out the maximum price you are willing to spend on your first home. Be sensible and opt for a home that you can do something to in an effort to outperform the market.
Saving your cash to buy the worst house on the best street means you can leap up a couple of extra rungs on the property ladder the next time you are ready to move. This means that you could choose an alternative purchasing route instead of the traditional estate agent’s window. There are plenty of property makeover shows on TV that shows off the joys of the property auction. Exciting and just a little bit daunting, you could find yourself with a bargain on your hands. Read the legal pack, make sure that you can get a mortgage on the pad, and then set about creating a scheme of works. Before long, you might be selling up and pocketing a healthy profit once you’ve renovated the home.
Being a seasoned renter does have its perks. However, you might now be ready to think about your future, purchase some bricks and mortar and get yourself a mortgage. Follow this guide and you’ll soon be on the property ladder.