3 Money Saving Tips for First Time Buyers

by James Hendrickson on July 31, 2017 · 0 comments

home-1682316_640It is fair to say that the housing market remains relatively lacklustre at present, with the British Bankers’ Association (BBA) reporting that mortgage approvals hit a nine-month low as of June. House prices are also unlikely to rise by no more than 2% during 2017, while some reports suggest that they may also fall flat next year.

This is arguably good news for aspiring first-time buyers, however, who have been forced to contend with a sellers’ market over the course of the last two years. Even many of independent resources and innovations in the recent market appear to have been aimed at vendors, including popular online agents such as Hatched.

The recent news means that now be the ideal time for first-time buyers to strike, so here are some tips to help them on their way!

  1. Save as Big a Deposit as Possible

This is a piece of advice straight out of mortgage 101, but it remains more relevant today as it ever has previously. After all, you will no longer have access to flexible, 100% mortgage offers, while the potential for interest rates to rise in the near-term could also increase your debt burden incrementally if you do not invest in a fixed term.

You can minimise your long-term debt and total repayments (along with the total amount paid in interest) by saving as large a deposit as possible, however, as this enables you to lay down a large lump-sum again the investment.

We would recommend aiming for as high as 20% in most instances, although you should at least look to pay 10% of the purchase price in the form of a deposit.

  1.  Aim for the Lower End of Your Budget

As an aspiring, first-time buyer, it is all too easy to get carried away when you are first advanced a mortgage offer. This can cause you to effectively spend outside of your real-world means, however, as you focus on so-called ‘dream’ properties at the higher end of your budget.

By being willing to compromise on certain features and prioritising properties towards the lower end of your budget (and mortgage offer), you can minimise your total repayments and create more disposable income going forward.

This means that you can save more effectively in the future and potentially pay off your mortgage quicker, enabling you to take a further step on the property ladder when you get older.

  1.  Take an Experienced Home-owner Along for Viewings

By now, the time will have come to view potential properties, but this can be a challenging pastime if you are inexperienced and unsure of exactly what you should look for. Remember, you would take a seasoned motorist or knowledgeable mechanic with you when buying your first car privately, and the same principle should apply to home-buyers.

When viewing properties, you should take an experienced home-owner with you to provide reassurance, insight and support. While we would also recommend seeing the property alone and with your partner, a second or third viewing with a seasoned property owners can deliver a sense of perspective and help you to view to house as an investment proposition.

You may not want to consider your home as an asset class, of course, but the last thing that you want is to be lumbered with negative equity and house that will actively lose money over time.

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