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Considerations to make before buying your first home

Purchasing your first property is rewarding and exciting, but can be expensive and stressful. There are many emotions that can be experienced when purchasing your first property. Here’s what you should consider before purchasing your first home so that your experience is a positive one!

 

Mortgage commitments

When purchasing your first house, you will need mortgage. This means, you will be committing to pay a monthly repayment to a lender as part of an agreement to borrow the money you need for your property. If you do not pay back your repayments in time, you will be at risk of having your property repossessed.

It’s extremely important that you understand that you are financially tied down when you have mortgage. You can sell your property if it becomes too uncomfortable for whatever reason, but this will add to your expenses and can become costly.

 

Down payment

Once you are happy with having a mortgage and know the commitment that you are signing up for, it’s worth thinking how much money you would like to put down as a down payment.

Typically, first time buyers aim for 10% but this will only provide you with the highest mortgage rates which may not be financially sensible over the years that you are paying back your repayments.

If you can wait to increase your deposit, in order to get a better mortgage deal, this is something you should consider, as it will be financially beneficial in the long term.

 

Explore government scheme options

The Government runs two separate schemes to help people struggling to buy a home. The Help to Buy scheme and New Buy are available to buyers with a deposit of between 5% and 20% of a property’s value.

They work by either offering you an interest free equity loan to buy a new build property or by the government part guaranteeing a mortgage loan to make it less risky for lender to offer you a mortgage.

 

Freedom restrictions

Are you thinking of travelling the world or thinking of following through with a business venture? Things like this will be put on hold for a long time if you are going to commit to purchasing a property.

There are some potential ways that you could get around restricted freedom, such as renting out your property or sharing the repayments with a partner or family members, however you are increasing risks of running into financial issues further down the line as your may not necessarily be in complete control of your mortgage payments.

If you are looking to travel or invest in a business idea you’ve had for years, it’s best to follow through with those things first before investing yourself into your first property.

These are just some of the things to consider when you buy your first property. Please don’t hesitate to contact us and speak with one of our experts for more information about buying your first property.