- 1 How Much Do You Need to Buy A House?
- 2 Budget for Another Cost of Buying A Home
- 3 Make Sure You Can Afford Your Monthly Repayments
- 4 Apply for Affordable Home Buyers’ Schemes to Get You on To the Property Ladder
- 5 Find A Mortgage
- 6 Decide If You Want A Freehold or Leasehold
- 7 The Mortgage Application Process
- 8 Get A Guarantor
Are you a first-time homebuyer in a dilemma wondering what you need to buy a flat or a house? Yes. Then you have come to the right place.
Buying a home for the first time is always a big deal for everyone. Unfortunately, most people view it as a sign of being mature and financially responsible.
However, owning a home sometimes is a big commitment, and it is not a guarantee that it is a good investment.
This guide takes you through buying a home, including your savings deposit, and applying for mortgages.
How Much Do You Need to Buy A House?
Before you look into buying a deposit, you need to save for a deposit; this means you need to save about 10%- 50% of the total amount you like to purchase your dream home.
For example, if you need to buy a home costing $200000, you will need to save at least $10000, which is 10%.
Saving more than 10% will help access a broader range of cheaper mortgages available on the market.
Budget for Another Cost of Buying A Home
Use a Billy calculator to calculate how much you will pay when buying your property besides your monthly payments.
There are other costs you will incur when purchasing a home that includes
- Survey cost
- Solicitor fee
- Initial furnishing and decoration
- Stamp duty (land and building tax or land transaction tax fees)
- Removal cost
- Building insurance
- Mortgage arrangement and valuation fees.
Make Sure You Can Afford Your Monthly Repayments
When buying a home for the first time, it is crucial to bear in mind that you truly need to afford to take this huge step.
For this reason, it is always vital to arrange and hold your budget together before you begin looking for a property.
Due to the development of science and technology, technology for real estate agents is stricter, and it contains strong measures to validate if you can pay a mortgage.
Lenders will always check if you can afford the mortgage and stress test your ability to make your payments if the interest rates rise or circumstances change—for instance, early retirement while having a young family.
Technology for real estate agents.
While applying for the mortgage, you’ll need to show your lender evidence of any spending as there is for the income you have and prove your income.
Apply for Affordable Home Buyers’ Schemes to Get You on To the Property Ladder
Today several government-backed projects aim to give home buyers a helping hand on buying property.
Additionally, creditors will need to know if you can repay your mortgage if you can use these schemes.
Find A Mortgage
Today there are numerous mortgage deals that you can pick for home equity. Therefore, you need to be highly vigilant when choosing the right one for you.
Making a decision here depends on things, and for this reason, you will need to do some research and talk to experts such as mortgage brokers.
Decide If You Want A Freehold or Leasehold
As a first-time buyer, it is advisable to buy a freehold, meaning you own the property and the land it sits on.
If you are planning to buy a flat, note that you will be buying a leasehold.
The Mortgage Application Process
It doesn’t matter the type of mortgage you are looking forward to applying for. The lender demands to know if you can continue to make your repayment even when you are in the middle of an event affecting your financial plans.
As a result, the creditor will ask you to provide information of your this, including
- Your loans
- Household bills
- Other costs including your clothing, insurance, and travel
You need to show evidence of this by providing bank statements and a payslip. If you are self-employed, you will be asked to provide a tax return statement that dates back two years ago.
Get A Guarantor
If you are struggling to get a mortgage to buy your first home, then you might want to consider getting a guarantor mortgage.
It is advisable to get your parent guardian or a close relative to be responsible for paying the mortgage if you cannot.
Keep in mind that the guarantor needs to be able to afford to pay your mortgage if you are in a difficult situation.