Picking up the keys to your first home can be one of life’s most exciting moments. It’s even better if you make the move confident that you’re thoroughly prepared to hit the ground running both financially and practically. Here are some tips to help.
Get pre-approved for a mortgage
Getting pre-approved for a mortgage is helpful for anyone buying a home but it’s particularly useful for first-time buyers. There are two main reasons for this. The first is that the process forces you to think carefully about what you can really afford. The second is that it reassures sellers that you are a serious buyer and can actually make good on any offer.
Think carefully about the total effective purchase cost
The total effective purchase cost is basically the purchase price, plus transaction/moving costs plus any upgrades you need to make on the property. If you’re a first-time buyer then buying a property in need of some refurbishment may help your budget go further. It is, however, important to be realistic about what this means in practice.
In particular, you need to think about your level of DIY skills and access to tools. You also need to think about how long you can reasonably live without certain features in your home. As a rule of thumb, if the necessary upgrades relate to the kitchen, bathroom, gas or electric, you’ll need them done as a priority and you may need them done by a registered trader.
Assess the running costs of a home
Even if you’re used to paying bills, you need to keep in mind that different types of property will have different running costs. For example, a modern city-centre flat with top-quality insulation, double-glazing, a modern boiler and super-energy-efficient appliances, is going to have much lower running costs than a rural period property with no insulation, single-glazing, an ancient boiler and elderly appliances.
That’s an extreme example (plus you could improve the energy-efficiency as you go) but the point to remember is that you do need to look at each house individually. Also, remember to check your council tax liability and consider the cost of transport and necessary insurance policies including home, contents and car insurance.
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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.