Home-buying is not easy, especially if it’s your first time. But you need not be a real estate specialist before you can do it correctly. Here are tips to make the job easier:
Know how much deposit you need to prepare.
Before you check out properties, it’s important that you have saves enough to make the deposit. Generally speaking, you have to try to save no less than 5% to 20% of the cost of the house you’re interested in. If you can save above 5%, you will be able to access a bigger range of economical mortgages that may be available on the market.
Know how much you need to pay for other home-buying costs.
Besides your monthly mortgage payments, there are others costs that you also have to cover when buying a home. For example, you have to pay survey costs, building insurance, stamp duties, solicitor’s fee, and all the rest.
Be sure you can afford the your monthly payments.
It’s smart to have a budget prepared before you begin searching looking for a property. The mortgage approval process has become very strict these days. Lenders will investigate if you can afford the mortgage payments, and also ‘stress test’ your capacity to pay if interest rates were increased, or if your life changed in significant, as when you decide to start a family or go into retirement.
Get to know government-supported home-buyer schemes.
Many government-supported schemes offer financial assistance to home buyers. However, dven if you can use any of these schemes, lenders will still need you to prove that you can indeed afford to make your repayments.
Find a good mortgage.
With the huge number of mortgage deals you’ll find today, it can become tricky picking one. For one, there are so many things you have to consider, so you really have to do some research and even talk to experts, such as mortgage brokers.
Difference between Freehold or Leasehold
If you intend to purchase a house, you’ll likely purchase the freehold, meaning the house as well as the lad on which it stands. If you’re purchasing a flat, that means you will pay for leasehold, or buy into a portion of the freehold.
Applying for a Mortgage
Regardless of the mortgage you apply for, the lender will want to know whether you can continue making repayments even if interest rates increase, or if there are any unexpected events that would reduce your financial capacity. To prove that you do have an income in the amount that you have declared, you may have to provide payslips and bank statements. If you’re a businessperson, you may be asked to prepare tax returns and business accounts in the past two tax years through your accountant.