Buying your first house should be a period of joy and eager anticipation. The current changing fortunes of the global economy have made this more difficult to achieve for first time buyers, higher deposits are expected as well as perfect credit score ratings; so getting a new mortgage for a first time buyer can prove to be extremely difficult.
Budget
In order to see if home ownership is a real possibility it’s a good idea to sit down and draw up a budget. Increasingly, young people are looking to the ‘bank of mum and dad’ in order to overcome the shortfall in their finances to raise the funds for a deposit and many banks and other lenders are aware of this fact. A bad credit loan is available but it is vital that the interest repayments are checked, if the loans are not repaid – this also applies to a conventional mortgage – then the long awaited ‘dream home’ can be repossessed. Most high street banks are looking for much higher deposits than was previously imaginable so first time buyers do have a lot of homework to carry out when shopping around for the most cost effective mortgage.
Expenses
When drawing up a budget, work and travel expenses should be taken into account, council tax rates are also important, as are energy costs. A draughty older house can cost a fortune to heat. Other fees to be aware of are solicitors’ expenses, possible stamp duty, estate agents’ costs and also surveyors’ bills. The house survey is one of the more expensive costs but this is a process that is absolutely vital, as the mortgage company will base their decision on the results of the survey, also, the building survey will investigate any potential structural disasters and give the buyer peace of mind. All too often the vendor will beautify their house before putting it on the market concealing cracks and damp patches so the unsuspecting buyer thinks that the house is in a better condition than it really is.
Extras
Petrol costs, council tax, and if the buyers have children, good neighbourhood schools, and even future work prospects are all important factors in any budget. The train and bus services are also a vital component, it’s absolutely no use buying a house in a new area and hoping to commute to work, if the house buyer is going to spend most mornings explaining to their boss that they are going to be late, because the train is delayed, yet again.
Good news
One of the few bright spots in a recession is that everything is negotiable. When putting in an offer for a house the buyer should never pay the asking price. The best way is to look at one of the online house price guides and check out the most recent prices paid for houses in a given area. The buyer should then put in what would normally be regarded as a cheeky offer, especially if the house has been on the market for a long time, and use this strategy as their launching pad to home ownership.
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