I’ve spoken before about how we’re not homeowners yet. We’ve been making plans for a while but with taking time away from work to study, have children and become self-employed, we’ve previously had to put it on the backburner.
This time away from looking at the property market has made us notice how different things are compared to a few years ago. We’ve recently been doing lots of research on what we need to do get ready to buy a house, as well as the sort of house we’d want to live in. It’s not always as simple as saving up then picking a house.
Things to consider before looking at buying your first home
Preparing to buy your first home needs to start well before you’re even opened an ISA for your deposit. Lots of factors get considered when it comes to getting a mortgage offer. These tips will help you start your journey to becoming a homeowner.
Look after your credit score
Borrowing money for a house is a large undertaking, so if you have a bad track record of paying debt back in the past, then lenders won’t be keen when you’re hoping to borrow for a mortgage. The best way to look after your credit score is to never borrow more than you can pay back, make payments on time and clear debt quickly.
Ensuring your details are on the electoral roll will assist your credit rating too. Remember to update the electoral roll every time you move, even if you’re not interested in voting.
Consider your budget
One of the most important things to consider is whether you can realistically afford the mortgage repayments. You can use a mortgage calculator to estimate what your repayments will be based on the amount you want to borrow and how long you want to borrow it for. Although your earnings might suggest you can afford to make mortgage repayments, it’s important to take other responsibilities into account. For example, an expensive car loan or childcare costs might lower the amount you can afford to repay on a mortgage.
If you have low to moderate income, you might want to check the USDA loan program. Compared to other loan programs, USDA loan offers the lowest mortgage rates and this program can finance 100% of the purchase price while you can access better than the average rates. If you are wondering if you are eligible for a USDA home loan, then you can check the usda map.
Think about the area
When you move into a house, the local area can affect how happy you are there. Does it have local shops? Is there a good public transport link? Moving to a gorgeous house might not be enough to keep you happy if you’re unable to travel to where you need to go.
Have a budget for furniture
If you spend all your savings on a deposit and moving costs it might leave you with an empty home. These days, most first times buyers tend to rent first so it’s likely you’ll have some furniture. Moving from a flat to a house might leave you feeling short on furniture if your new living space is bigger. Likewise, if you live with your parents until you can afford to buy might mean you have nothing to bring with you. Set up an extra savings account to decorate and furnish your new home.
Does it fit in with your future plans?
Before taking the plunge and buying a house, it’s important that it will fit in with your future plans. If you’re planning on leaving work to study, it might be worth holding off buying until you are done. If you’re hoping to start a family in the near future, think about whether your house will have enough bedrooms. Be clear on the sort of property you will want down the line to help you decide when you’re ready to buy.