Jeff Nevil
It is no secret that getting onto the property ladder is a challenging feat for the majority of first time buyers. It is the fundamental issue that income is not rising at the same rate of the housing market, however, there have been recent Government attempts to address the situation. However, here are some tips to help first time buyers.
The Government is encouraging new buyers with incentive schemes with these two types of savings. The above video does a fantastic job in explaining the difference between each account. The main incentive for both is the cash bonus a first-time buyer will gain after saving a certain amount, however which one a buyer chooses will depend on how fast they want to buy and how expensive the property is. It is also worth noting that with the Help to Buy ISA, you can only use the cash bonus after paying for the deposit whereas the LISA you can contribute your savings and bonus to the overall bonus.
To get a mortgage, you need to raise a deposit of around 5-20%, although getting a 5% deposit together is much easier than 20%, having a bigger deposit will open up a wider range of mortgages to you. However, when buying you also need to be aware of other costs like Solicitors, surveys and insurance plus Government fees which will also need to be budgeted for.
Last year’s Autumn budget announced that the Government had chosen to scrap stamp duty for 80% of first time buyers. This cut is only applied to the first £300,000, however it has already benefited around 16,000 first time buyers since November 2017. For this, you must be a first-time buyer and if you are with someone it has to also be their first time. This is also in combination with the LISA or Help to Buy scheme, saving you extra money and enabling getting onto the property ladder easier.
It is fantastic when you get a sizeable deposit together, however finding and securing a mortgage can be very hard if your uncertain on the type of mortgage to invest in. The two overarching mortgage types available are the fixed term and variable schemes, first time buyers often prefer the fixed rate as it makes budgeting easier. Then under those contracts, you have further categories like standard variable rates to tracker mortgages.
Congratulations on your first home, you are officially a homeowner. It is time to make the property your own, however it is not a time to start splurging on contents for your property. Budgeting is essential here as now you have the added ongoing outgoings in the form of bills every month. Furnishing your home does not need to be an expensive venture, we now have the world wide web which boasts a variety of outlets, from an online bed store to outlets where you can purchase affordable cutlery. It is often that online shops are cheaper due to the reduced amount of overhead costs that brick, and mortar shops have, furthermore, it is much easier to compare prices and reviews to get the best for you budget.
Saving for a property can be a daunting, long and hard road however there have been many success stories, like this first timer homeowner who is only 21. This shows the younger generation can do it and hopefully these tips will help you head in the right direction.
