Top pointers for first time purchasers looking to get on property ladder
Andrew Phillips, from the Lincolnshire Credit Union, gives us his top financial tips for very first time buyers seeking to get onto the property ladder.
Financial pointers for first time purchasers
Buying your very first home is one of the most stressful and biggest challenges you will face in your life.It will take a chunk out of your wage and it will most likely take you years in order to save and afford your first property. There are methods that can make the procedure much smoother and less stressful.
Ackling your deposit
Prior to you can even consider the overall expense of your house you have to first look at paying for the deposit.These days a typical deposit will be around 10 per cent of the overall expense of the property.If the property you desire to buy costs 100,000, you typically require a deposit of 10,000. There are government led schemes that are permitting first time buyers to get a foot on the ladder with as little as a five per cent deposit. The Mortgage Guarantee Scheme makes it possible to purchase property under 600,000 with a five per cent deposit.
Be realistic, can you afford this?
You need to be realistic when purchasing your very first property.You may be tempted to choose a five bed room house with a double garage and view of the cathedral however would you reasonably be able to afford this, particularly if it's you moving in on your very own. We all desire the very best but think about how you might afford to reside in your new house. You need to consider the cost of furniture, heating, electricity, food and far more. Choose something practical; if you're moving in on your very own you don't require any more than 2 bed rooms.
Save, save, save!
Among the most important things to do when purchasing your very first property is to save as much as possible.The most reliable method to do this is to sit down and take an excellent look at just how much money you have can be found in and just how much you are spending. Remember that your end goal is a tough one so a reasonable proportion of your earnings ought to be going towards saving for your property. This means limiting you invest in high-end items, holding back on nights out and maybe switching the beaches of Crete with the beachfront of Skegness.
From exactly what you can save each month, work out the length of time it will take you to save exactly what you require. If you are aiming to save 8,000 and you can pay for to save 400 per month, then you are taking a look at about 20 months or just little under 2 years. Do not be discouraged by how long it may require to save, as philosopher Lao Tzu once stated "A journey of a thousand miles should begin with a single step".
Utilizing the ISA Scheme
This plan is created specifically for individuals who are saving up for a home loan deposit on their very first home. Time purchasers will receive a 25 per cent contribution from the government on top of the amount they have actually saved, for example, the government will give you 2,000 if you save 8,000.The maximum month-to-month amount that can be deposited is 200; an extra 1,000 can be transferred when opening the account, meaning that 1,200 can be saved in the first month. The plan is just offered for individuals aged 16 and over and for houses worth as much as 250,000.Accounts are restricted to one per person rather than one per home so it is possible that joint buyers can both get the additional money!
How the Credit Union can assist you?
The Lincolnshire Credit Union is also here to help you get on the property ladder. We provide simple cost savings and affordable loans with access to our free life insurance and other schemes. If you wish to save up for a deposit on your house, you could save regularly from your wage into a Credit Union Share Account.You might do this by organizing a standing order with your company or you can join the Payroll Deduction Scheme if your company is in partnership with the Credit Union. If you need a little additional cash to reach your goal, we might assist you out.