It has always been a challenge for first-time homebuyers to get their foot on the property ladder. But recently, the obstacles to owning your own home have become even greater — prices are at record levels which means that deposits required for purchasing property have increased too. But the home-buying process doesn’t have to be a stressful one. Here are some tips for first-time home-buyers to help you get into your dream home.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Know the state of the market
Having an understanding of how the mortgage application process will work is only the beginning. It’s important to know the state of the housing market so you can decide on the right time to buy, if you have the luxury of being able to wait until the odds are in your favour.
At the moment, with interest rates rising steadily thanks to increasing inflation, you will be facing higher prices and along with that comes the necessity for bigger deposits. While there are mortgage options for those only able to put down as little as 5%, the more money you are able to put down, the more options you’ll have for mortgage products, ensuring you’ll get a deal that works for you.
Have a realistic savings plan
The best way to ensure you stick to a savings plan is to ensure that it is realistic and achievable within the timeframe you’ve allotted. Of course, the more time you allow yourself to save, the better off you will be. But first, work out how much you can comfortably put away each month and remain consistent and diligent with your savings. Once you know how much you can save you can figure out the best options for you to maximise those savings, whether that’s simply a dedicated savings account or a longer-term investment path.
Maximise your savings power
One type of investment that could be worth pursuing is an Individual Savings Account (ISA). An ISA is a great way to save money since you don’t have to worry about paying any tax, nor do you need to declare interest earned or capital gains on savings and investments held within your ISA.
Specifically, a Lifetime ISA (LISA) is designed for this very purpose — to save for a home, or for later on in life. Available for people under 40 years old, LISAs allow you to save up to £4,000 a year, every year until the age of 50. A huge bonus for a LISA is that the government will top up your savings, adding 25% up to a maximum of £1,000 each year. There’s no charge to withdraw your money as long as you use it for the purpose of buying a home (or have waited until 60 to retrieve the money.)
Get help if you can
While not everyone has someone to turn to for financial assistance, the Bank of Mum and Dad (or grandparents!) has played a large role for many young people who wish to get on the property ladder.
Professional help is available
Besides seeking help from family or loved ones, one of the best tips we can give for first-time homebuyers is to seek professional advice to help you through the process.
Even though you might still face some challenges, you won’t be going through it alone. To discuss your mortgage options as a first-time buyer, get in to with Dental and Medical Financial Services today.