If you are thinking about buying your first house, you need some good advice because it has gotten a lot more complicated lately. When your parents were younger, getting a mortgage to buy a home was quite a simple process. Now, not so much and murky companies are waiting for you to make a mistake so that they can take thousands from your bank account. If you want to simplify the process, take buying a house one step at a time and follow this guide.
Keep Your Credit Rating Healthy
Before you even think about buying your home, you need to be keeping a constant check on your credit rating. You must make sure that it does not drop, otherwise getting a loan for a mortgage will become a nightmare. There are plenty of factors that affect your credit rating from how well you have paid bills on time over the years to the way you use credit cards. You can check your credit score online and then look at ways on how to improve your credit score here.
Saving Money For A Deposit
For those fresh to the market, you may not know that you are never expected to pay the full price for your home upfront. Unless you have been saving for years, this is usually not even a possibility. All you need is the deposit to put down on the home. With a good credit score, you can then get a mortgage to pay the rest of it off in installments. A deposit on a home is usually around five to ten percent. But the bigger amount you can pay upfront, the cheaper the mortgage payment plans will be. Although typically you will pay a deposit of around ten thousand for a house worth two hundred thousand.
Affording The Mortgage
When arranging a mortgage you have to make sure that you can pay the asked price each month. This will not be a huge amount of money, but it will be coming out of your paycheck. You will most likely have to cut back on the luxuries so get used to home cooked meals rather than fancy restaurants. The sooner you can pay off your mortgage the better off you will be. Some young owners do take out a mortgage, get their parents to pay it and then pay their parents back instead. This is one way of making sure you always keep up to date with payments but may not be appealing to you.
Take Other Costs Into Account
Remember, that buying your home means more than just paying the deposit and the mortgage payments. You are going to need to pay a service to move your belongings into the home as well as paying the bills once you are moved in. These may be bigger than you are used to, particularly if you are moving from a flat into a house for the first time. You will also have to think about whether or not you want to make improvements to the home straight away. There are ways to keep the cost of home improvement low, but it is still going to cut into your budget. Make sure you have some extra cash in the bank to pay for these types of needs and wants.
We hope you can use this guide to make purchasing your first home easier and find your dream house.