Buying your first home is an incredible, exciting milestone. Finding the property, getting a mortgage and jumping all the hurdles of paperwork can present some challenges though. Buying in London can be even more difficult. Prices are high in the capital and the competition for affordable homes can be fierce. If you’re a first time buyer with your heart set on London, follow this guide to help you find your dream home.
Prices in London are always higher than elsewhere in the country, so you’re going to need some serious savings behind you for your housing deposit. If you don’t have one already, open a Help ToBuy ISA. This government scheme for first time buyers is about to be scrapped, but you can still open one until November 30th. With this ISA, you can get up to £3000 from the government on top of your own savings.
Get your ducks in a row with your finances, so you’re ready. Check your credit scores, set a budget and deal with anything that might put off a mortgage lender.
Consider A Property Finder
A property finder is like an insider contact. They can use their network to find new properties on the market and get you in first to see them, which can help you secure a lower price. Once you’ve found a property you like, they can help you to negotiate too.
If you can, visit some estate agent’s offices in person to see what properties they have that would suit you. You can spend some time with an agent this way, who will get a better idea of what sort of property you’re looking for. You’ll be top of their list if something suitable lands on their books.
Do Your Research Into Mortgages
There are many mortgages out there, and they won’t all suit you. Do plenty of research to find the best deal for you. Make sure you understand about interest rates, borrowing periods, fees and exit penalties. Do your homework and work out what kind of mortgage will suit you. From there, play with some mortgage calculators to find what sort of deal you might get. Visit a mortgage broker who can help make sense of it all and get some idea of where to go next.
The mortgage loan is for everyone, individual or professional borrower, as long as you own at least one property. Then, its operating methods are similar to those of a traditional loan: the lending institution establishes an amount, a duration and a schedule of amortization. A mortgage loan can be at a fixed or variable rate, flexible, repaid early, long or short term. The amount granted is proportional to the net value of the mortgaged property (itself determined by an expert). You can calculate your mortgage by using a professional service, such as a mortgage loan calculator. This way you can work out a budget.
When you buy a home, you will first need to be able to pay off the monthly mortgage payments. Popular wisdom says that monthly payment amount cannot exceed 1/3 of your monthly income. However, it is a little more complicated than that, hence the interest in calculating your budget. Start by making an inventory of your expenses, if you are not used to doing so. How much do you spend each month at the supermarket, at the restaurant, how much is your car loan repayment, how much is your telephone bill, the price of your insurance. Be as generous as possible. Your current rent will not be included, of course, as it will be replaced by the loan repayment. You can do the opposite, by checking whether the savings you were able to accumulate as a tenant are much greater than the difference between the future monthly payment and the amount of your old rent.
Be Ready To Negotiate
Look at properties a little under your maximum budget. If you find somewhere that you love, you’ll have some room to offer a higher price to force out other buyers. On the opposite end of the scale, don’t be afraid to look at properties a little over your budget too. If you have all your paperwork and a mortgage offer lined up and are ready to move quickly, you might find a seller will take a lower offer if they can get a faster sale.
Be open to viewing a property that you might usually have considered. Trust your agent to send you properties that will suit you, so if they suggest a flat when you were thinking of buying a house, go and see it anyway. You never know; it might be the one.
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