Buying your first home is both an exciting and daunting time. It’s probably the most expensive and important purchase you’ve ever made, and there are lots of different things that go into it. Here are our top tips on important areas of home-buying that all first home buyers should look into before taking the plunge.
Figuring out your budget
Before you start looking into mortgages or searching for properties for sale, you should start by setting a budget. Stick to it. A useful first step is to calculate your borrowing power and see how much banks would be willing to lend you. However, that doesn’t mean you need to borrow that much, or that you should do so. Always think about how much you’re willing to pay in repayments. Also take into account the fact that the interest rate might fluctuate and that your payments could go up. When you decide on a budget, you also need to remember that there are plenty of hidden costs involved in buying a home, such as borrowing and government fees, and the upkeep and taxes of a home will also be more expensive than renting.
Getting a mortgage
Most people take out a mortgage when they buy a home. To get the best deal possible, you should save as much as you can for a deposit. This can be as low as 5% in some cases, but ideally, your deposit will be 20%. When the banks assess your mortgage application, they’ll be looking at the 5 C’s: your character, including credit rating and financial history, capacity, your ability to repay based on your income, capital, the size of your initial deposit, collateral, which is the property you’re buying, and conditions, which includes interest rates and loan amount. Some things that will help improve your position include paying off any debts, improving your credit rating and having a stable job with a good income. As a first-time home buyer, you might also be able to take advantage of some grants and schemes to help with the financial side of things, so it’s always worth researching that.
Choosing your location
With the financial stuff out of the way, let’s think about actually choosing your property. Finding the right location is a lot about your personal preferences, but you should also be thinking about the demand for the area if you ever decide to sell or rent. It helps if the property is near public transport, areas of employment, schools and shops. However, you should also consider your own specific situation. If you don’t drive or don’t have a car, you would want access to public transport and be able to reach important facilities by walking. If you have children or plan to have them in the future, look at where the closest schools are. If you’d like to live in a bustling city close to the action and your place of work, that’s the kind of place you should be looking at. If you would rather live somewhere more remote and have access to nature and peace and quiet, that’s also very important to consider.
At Xircon Homes, we specialise in building exceptional quality houses at fair and reasonable prices for first home buyers. We can assist you in escaping the rental trap and creating a house that you can call your own at last!