If you’re considering buying your first ever home it can be a difficult time. It’s a complicated process, buying a house, and it isn’t a decision that should be taken lightly. This is a guide to navigating the tricky world of first time buying, and making sure you don’t invest big in the wrong thing!
Is Buying Right for You?
The first thing you need to work out is whether or not buying a place is right for you, and if it makes monetary sense. The main problem facing 20-somethings looking to get a foot on the property ladder is the affordability of housing. America’s housing prices, until recently, were on the up. Most young people couldn’t, even with well-paid jobs, afford to put deposits down on housing. So you have lots of young people continuing to rent and spend large amounts of money paying for someone else’s houses because they can’t but their own.
Before taking the big step of buying you do need to have the finances to back up a move. Unlike renting, deposits are huge, and mortgages aren’t easily paid either. One of the big drawbacks of buying is that it limits your freedom. Renting frees you up to be able to move where you want when you want. This means that you can apply for jobs all over states and even the country without worrying about uprooting completely.
On the other hand, this is short term thinking. If you’re someone who wants to invest in their future rather than the here and now, buying could be for you. Buying does tie you up with a house, yes. But it also can cost significantly less as opposed to a lifetime of renting. Renting comes in smaller installments than buying does, but after the initial outlay having your own place makes financial sense.
Buying a house doesn’t mean you’re stuck with that area or property. What it means is you’ve invested your money. If your job allows it you could continue to rent whilst you privately rent out the home you’ve brought. This frees you up to travel and be flexible, with the assurance that you have a second income and home.
Buying a home means that mortgage payments go into paying your own place off, rather than a landlord’s pockets. On the flipside interest rates and cost, fronts do put a lot of people off.
The First Steps
If you’ve decided that buyings for you there are some things you’ll need to get in order. As you’ll know from renting, credit checks do take place. Whilst they might have been relaxed before when buying they’re hugely important. If you know (or find out) that you have a bad credit score it could harm your application for loans, and even for a mortgage. Check out this website to see how you could get your credit rating repaired before the move: https://creditrepaircompanies.com/.
Next, consider your earnings. You may have the 5 or 10 percent deposit needed but can you cover the other costs of moving? There are booking fees, survey fees, stamp duty, and much more. Also you need to make sure your income can cover mortgage repayments. If you need to loan money from friends or the bank, it could mean that you’re not in a financial situation to move. Consider how you can save the money on your own. Move to a cheaper place to save on rent or try and get a job with a higher salary. The less debt you’re in when it comes time to move in will make it easier to pay your mortgage off in the long run.
Choosing Your New Place
This is the fun, but also not so fun bit! Choosing a new place is exciting but you have to be sensible. This is a huge investment and you need to make sure you spend your money wisely. You need to think about how long you see yourself living here. If you want it to become a family home are there great schools nearby? Can you commute to work from your new place? Have a look at the house prices in the area and if they’ve been stable over a period of time. This gives you a good idea about how much yours will be worth if you ever want to sell.