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Nine Smart Ways to Get on the Property Ladder

Buying your first home can be both exciting and scary. Today, it is harder to get on the property ladder than any other time in Britain. House prices are still increasing, and you will need over a year’s salary saved up as a deposit, to be considered for a mortgage. While the task is challenging, it is not impossible, if you are able to adopt some smart money behaviors that will help you maximize your investment and determine the safe level of debt. Below you will find a few tips on how to get on the property ladder in a smart way.

Buy Cheap and Improve

One of the smart methods people use to get on the property ladder is buying a property that is available for a low price, as there are plenty of decorating and improvement, modernization jobs to be completed. If you can put up with the imperfections of your home, and have some basic DIY skills, you can buy the property cheap. Obviously, if it is not in a habitable condition, you will find it hard to secure a mortgage, but if there are no major issues, you can still get finance. If you can save up enough to buy at auction, or borrow some cash, you are likely to make your money back in a few years.

Bare Necessities

Your first home should not be perfect. Today, not many young people stay at the property they buy the first time. It simply needs to serve the purpose and have a good investment potential. If you can buy a 2-bedroom flat that will serve you for a few years while you are working long hours and are building your career, you can improve its condition, turn a profit, and move into a more suitable home later on.

Help to Buy

Government schemes, such as the help to buy program allow people with a low income to get on the property ladder. It is always a good idea to get in touch with property experts in your area, such as Mark King Properties to get advice on different low interest loans and government backed deals. You will be able to secure a house with a lower deposit or reduce your monthly repayments, making your home loan more affordable long term.  

Right to Buy

If you are living in a house that is rented from a housing association or local authority, you can look out for deals that allow you to purchase the property at a discounted rate. You will be able to stay where you are, and save money on repayments. You can take advantage of government help whenever you would like to buy a flat that is in a rehabilitation area.

Shared Ownership

While you might have heard a lot of ugly stories about shared ownership, you might be better off financially if you find a company that is fair and transparent through the process. You might end up paying much less combining the rent and the mortgage than you would pay of you simply rented in the same area. With shared ownership, you opt to purchase only a certain percentage of the home, and you pay rent on the rest.  

Save Up Using Tax Free Schemes

While saving money is a good idea, you need to learn how to compare different accounts and interest rates, so you can make the most out of your deal. With interest rates low, you might need to increase your risk level and put your money in an investment fund, backed by the government, and tying up your assets for a few years to get the best rates possible. If you are not the person who would shy away from danger, you could even try your luck and put your skills to a test using stock market or foreign exchange investments.

Borrow for the Deposit from Friends and Family Members

If you have already built up a solid income and a stable job, but find it hard to save up in a short period of time, or don’t want to miss out on a deal, you might be able to borrow the money you put down from friends or family members. You will get into debt, but be able to purchase a suitable property at the right time. Make sure that you are comfortable with making payments on your private loan and mortgage at the same time.

Build Up Your Credit Score

Before you could start thinking about getting a home loan, it is important that you focus on building a financial history and maintain some credit repayments for a couple of years. Even if you only have credit cards that you pay off each month, or a credit on your smartphone, this will show the potential home loan company that you can be trusted with making regular payments. You could also take out a short term loan and pay it back before you apply for a mortgage.

Self Employed? Get Your Books In Order First

While having a solid job can help you get a home loan, self employed people find it much harder to get a home loan for a property than those who are employed by companies. The secret is that you get your books in order, show a growth in your income levels, and document everything. You will need to show that you have some regular clients and a solid residual income. It is also recommended that you wait a couple of years after starting your business before you apply for a mortgage.

Some experts say that it is harder to get on the property ladder today than any other time in history. Buying a house is a long term commitment, and you have to make sure that you don’t end up losing everything. Choose a deal that you are comfortable with, but compromise on size and condition, and improve the value of your home over time so you get a great return on investment.