If you’re planning on buying a house, you have an exciting journey ahead of you. A property tends to be the most expensive thing anyone invests in in their lifetime. But at the same time, it will secure you a living space that you can call your own and work on to completely suit your individual preferences and needs. At the same time, this journey can be long, time consuming and a real challenge. There are a number of steps that need to be completed before you can sign your name on the dotted line and receive your keys. Here are a few that you should take into consideration before getting started!
Coming Up With a Budget
The first step you need to take when considering buying a house is knowing how much you can spend on this venture. Everyone will have an individual budget that they can realistically afford. You need to determine your budget before getting started so that you can only view homes that are realistic and affordable. The following steps will help with this.
Use a Mortgage Calculator
Start out by using a mortgage calculator. There are plenty of free to use options online that can determine how much money you have available to you and what you can then realistically afford to pay out on your mortgage on a monthly basis. Having a clear cut figure can give you something to work with!
Consult Mortgage Brokers
You can also consult mortgage brokers to determine what their requirements would be to provide you with a mortgage of the size that you’re considering. Brokers like Mortgage Quote can advise regarding things like credit score, required deposit size, rates of interest and much more.
Saving Your Deposit
If you have a figure that you know you can afford, you can then start figuring out what size deposit you’re going to have to save to be able to be approved for a mortgage. Nowadays, mortgage lenders expect anything between a 0% deposit to a 20% deposit. It’s up to you if you want to place down more than is absolutely required. At the end of the day, the bigger a deposit you put down, the smaller your monthly mortgage payments will be, making paying your overall mortgage back faster or easier. To save your deposit as best possible, the following steps should help:
Clear any existing debt first – this will ensure that you’re not spending money on debt interest and this money can then be put towards your new home. It also helps to improve your credit score, which can help with being approved on a mortgage.
Open a LISA – a LISA, or lifetime ISA, is a long term savings account with a high interest rate. You can get more return on your money while it sits around being saved. Just make sure you’re 100% sure you want to use it on a house, as you can receive fees, fines or charges for withdrawing early or for any other reason.
Reduce Spending and Maximize Saving
Once you’re debt free, you’ll have a new slate and can start working towards your goal of saving your mortgage deposit. Now really is the time to start saving! But what steps can you do to maximise this skill and to put away as much as possible? Here are some suggestions that could prove pretty useful throughout this journey!
Buying a house can be stressful, sure. But hopefully, some of the above information will really help you along the way!
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