If you are finally in a place where you can start to think about saving and preparing to purchase your first home then you might be wondering about how the process works.
Buying your first home is extremely exciting – there’s no doubt about that – but it can also be an extremely daunting one because there’s a ton you need to think about. It’s not something that you want to rush, which is why it’s so important that you are 100% prepared about the process.
Want to learn more about making the experience less stressful? Then I’ve got some helpful tips and advice for you.
Improve your credit score
First things first, you’re going to need to make sure that you have a good credit score, in order to get accepted for a mortgage and have a fairly decent chance at a reasonable APR. Before you think about increasing your credit score you first need to find out what it is – this can be achieved with credit score sites and apps which will give you your credit score out of a certain amount and will tell you what you need to do to improve it.
The best-paid site to use would be Experian as they give you a full breakdown of why your credit score is what it is and they also provide detailed advice about how to improve it. If you are looking for a free app to use then Noddle or Clearscore are both great free apps to consider, as they advise you of your credit score and give you some brief factors as to why it is what it is, however, as it is free it isn’t quite as detailed as what Experian is.
Now that you know what your credit score is you can decide on the next steps. If your credit score is high then you can start thinking about mortgages, if your credit score is low, however, then you will need to start increasing it. This can be done in a number of ways, one of which is by getting credit and paying it back – this will then increase your credit score.
The next step is to look at saving for a deposit. The more you can save for the deposit the better, as this will increase your chances of getting a mortgage and will reduce how much you need to pay each month. The usual amount for a deposit is 10% of the house price, which means that if a house costs 200,000 you would need to save 20,000 as a deposit.
Saving this amount of money takes time and determination. You can opt to put a set amount of money aside each month for the purpose of your house deposit or you can use money saving apps like Plum, to help you. Another option is to set up a direct debit to take a set amount from your bank account each month.
Learn to budget more effectively
Becoming more frugal and budgeting effectively will really help you if you are struggling to save for that all important deposit. Budgeting isn’t about forgoing all luxuries, it’s simply a case of being smarter about what you are spending and where you are spending it.
You might want to go out for less meals, don’t go to the movies as often and cut back on certain luxury foods, for instance. You can also look at getting budgeting apps will which show you what you have spare each month to help you keep on top of bills and allow you to know how much you can save for that month and still be able to live well.
Talk to a mortgage advisor
Next you should start looking at the actual mortgage process. When looking into what mortgage is best for you it is always advisable to talk to a mortgage advisor, as they will be able to discuss with you what the best route to go down is based on your credit score and your circumstances. They will also be able to get you the best APR which can be really important as it will decrease the interest you have to pay if you get a reasonable rate of APR.
Apply for a mortgage
After talking mortgage options through with an advisor, the next step is to think about applying for your mortgage. You can do this with the help of your mortgage advisor who will point you in the right direction of the best mortgage broker, such as Altrua Financial, for instance. When applying for your mortgage you will need to know how much you are looking to spend for your house so they can advise on how much they will lend you towards it.
Start house hunting
Next, it’s time to start looking at what house you are going to be buying. There are a few factors you need to look at obviously the main one being remaining within your budget, so if you need to compromise on things to make sure you can afford your dream property, then you need to be willing to do this.
When looking for your house make sure you take a checklist for your viewings so you can ensure it meets the criteria for what you want. You can also use this check list to look at what would need to be changed, so that you can gauge the cost for these changes being made.
It’s also important to be critical when house hunting. Don’t take everything at face value. Look for signs of problems within the property, such as signs of damp or mold and pests being present.
You can also note what you would do with each room, such as what colors and flooring you would use, and also what rooms would be for what, so you can get an idea of the space you would have in the house. Having good space in the house is not just for how many people are in living in the property, it is also to do with what storage you have available, as no one wants to live in a cluttered home.
Get a second opinion
If you found the house you love and you are set on it then it may well be a good idea to get someone to come along to view it again that has a neutral standpoint, sometimes when you fall in love with a property you can overlook things because in your mind you just want to have the property. Having that neutral overview on the property will help you notice any issues and also they may have some tips to help with the house such as decorations tips and general advice.
There is a lot to prepare for when looking to buy your first house and get on that property ladder. Make sure your Credit score is top notch and that you seek advise where it is needed in locating a property and also when deciding on the mortgage broker you would like to go with, then it is just a case of saving up and getting that deposit ready for when you find that dream house. And save any extra money you made need to decorate and get that house to where you see it in your mind. It isn’t a quick instant process in most cases so prepare yourself to work hard and be patient to get to that end goal.