If the new year has left you dreaming of a space of your own, we’ve got a selection of top tips to get you started on your journey to home ownership.
Whether you’ve been planning on buying your first home for a while, or the idea has only just surfaced, we’ve got 10 things you can do today to make getting on the property ladder easier.
1. Open a Lifetime ISA
The Help to Buy ISA may have closed, but the Lifetime ISA is still going strong. You’ll get a government bonus of 25% on your savings. You can save up to £4000 a year, but you can’t withdraw the money for anything but buying a property (or until you’re aged 60) if you want to keep the bonus. It’s simple to sign up, and hey, free money.
2. Set up a direct debit
We know, thinking about your finances when you’re broke from Christmas is not the stuff dreams are made of. But setting up a direct debit for £25 each month to your brand spanking new Lifetime ISA will get you started. You can always add more when you know what’s going on. Even £25 a month will earn you a free £75 by the end of the year.
3. Check your credit score
Okay, perhaps we’re nerds, but checking your credit score can actually be…fun? Making a couple of little changes can really see it shoot up. Download an app like Clearscore and find easy ways to boost your score. It’ll help with getting great mortgage deals in the future.
4. Sign up to relative blogs and newsletters
Many good surveying firms share updates on great deals, tips for preparing to get on the housing ladder and things to look out for when you’re viewing properties. Sign up
5. Daydream
This one’s pretty easy – think about what kind of home you want and where you want to be. Is it a priority to be near family? Do you love your job and need an easy commute? Or are you looking to start a far-flung adventure, setting up home somewhere new? Is there somewhere you’ve always dreamed of living one day?
6. Browse online
Searching for homes on online portals isn’t just for necessity, it’s a full-blown hobby now. Having a look to see what’s out there is smart – it’ll give you a sense of prices in certain areas and help you decide what you absolutely don’t want. If there’s nothing you like the look of in your area (or price bracket) you can start adapting your search.
7. Think about a savings goal
You may not have been focusing on a deposit until now, but if you’re excited to find your own place, it’s time to consider it. A deposit usually needs to be 10% of the property price. So, if you’re looking at properties in the £250,000 range, you’ll need a £25,000 deposit. Don’t panic!
8. Consider Government Schemes
Government schemes designed to help first time buyers, like Shared Ownership and Help to Buy require a smaller deposit, so they might be a good fit for you. Help to Buy gives you an equity loan interest free for 5 years, and Shared Ownership lets you buy a portion of your property, and pay a reduced rent on the remaining part.
9. Think about your wage
Most mortgage lenders will only lend 4.5 times your salary. So, if you earn £25,000 a year, you’ll be able to borrow up to £112,500. Ahead of the new year it’s worth thinking – is it time to ask for a raise? Perhaps you want to retrain in a new industry, or pick up a second job? Bear in mind if you’re buying with someone else, you’ll borrow 4.5 times your combined income, making it slightly easier.
10. Make yourself a promise (and a plan)
We know, it’s easy for all of this to seem impossible. But it’s not. There are so many ways to become a homeowner once you decide it’s what you want. Whether you save gradually over 5 years, or you go full pelt in 2020, moving back in with parents, cutting out all essentials and making it happen, make it work for you. You know yourself and the way you deal with a challenge – go with your instincts.
Write your goal on a piece of paper and make sure you include your ‘why’. Why your own home? Why now? What happens if you don’t achieve it? How will you feel when you do?
Then spend some time in our First Time Buyers Hub, and find out all the information you need to make yourself a proper plan. This is your year – make the most of it.