Looking To Buy Your First Home? Here's Some Helpful Pointers.
Looking to buy your first property will be one of the biggest purchases you will ever make. It is amazing with this fact how many people are unprepared, I have noted a few common things we see and also what to do to help avoid these issues.
First of all, get your own personal finances in order. Too often we have discussions with first time buyers about debt and credit cards. A£25,000 deposit as a gift from your parents is hardly a deposit if you have £20,000 in loans and credit cards. If you are unable to afford your lifestyle whilst living at home, what makes you believe you can afford the cost of owning a property.Make sure you pay down all of your debts, life is more expensive than you think. If you have managed to build up debt for whatever reason, then manage to pay it down again this will treat you a great life lesson in sacrifice and discipline. You will also be able to enjoy your life a lot more without these debts hanging over you causing unnecessary stress. A quick exercise to help you understand your monthly budget will be to work out all of your income, then take away all of your current outgoings including lifestyle costs such as eating out and drinking. Look at your last 3 months statements and calculate your outgoings to the exact pound, it will make you more aware of your future spending and should help you save the money you need. Then try to reduce your lifestyle spending each month. This will allow you to save even more money.
Stop the gambling! This is a huge huge red flag for lenders.As soon as they see excess gambling transactions they are well within their right to decline the mortgage immediately. Gambling addiction is extremely high risk for the banks, which could potentially cause you to miss payments in the future. Some lenders may take your monthly gambling cost in to account as an expense,which can then reduce your lending massively and not allow you to buy the home you wanted. If you plan to buy a house in the near future, knock the gambling on the head.
If you are self employed, get your financial figures to your accountant as soon as your tax year has finished. Too many times we will be chasing people for their accounts. This can delay the process when buying massively, to avoid this in the future be one step ahead. Just because you have to file your accounts by a certain time doesn’t mean you can not file them earlier. The earlier the better in our eyes. One little tip on this, the higher your profit figure the more you can borrow.
Research the area you are looking to buy in. There is so much information on the internet now, it can take a 10 minute search to look at other properties sold within the postcode you are buying in. Knowledge is power and having as much knowledge of the areas as possible will allow you to negotiate as well as possible. On the point of negotiating, never give too much away to the agent from the outset. Once you have agreed a price then you can share your information with the agent.
Do not forget about stamp duty when saving for your house. If you are a first time buyer and buying a home up to £300,000 then there is no stamp duty to pay. From £300,000 - £500,000 you will pay a rate of 5%. This means if your purchase is £400,000, you stamp duty will be £0 for the first £300,000, then you will pay 5% of the final £100,000, making your stamp duty bill £5,000 for this purchase.
Chose your solicitor wisely. Your solicitor should be acting in your interest and your interest only. The cheapest solicitor does not always mean the best, speak with someone in your network with experience in property and ask them for a recommendation. A solicitor should protect you from any future issues that could arise on your property and potentially save you thousands in the long run. Lease hold properties have been a big thing in the news recently and there is a lot of dodgy long leases out there. Having a good solicitor will protect you against any unnecessary costs that could arise because any issues with the property.
Speak with an independent broker as soon as possible in the process. A good broker will guide you of all the issues you may face. They will have huge amounts of knowledge and contacts which will come in handy through the buying process. They should be able to put a plan in place to get you on the property ladder.
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