Planning for your dream home isnít always easy. Whilst you may have an idea of how many bedrooms you would like and if off road parking is essential, there are many other things you may need to consider before planning your dream home.
Here are a few financial tips to help you secure your dream home;
Getting your foot on the ladder
Any first time buyer lucky enough to have recently stepped onto the property ladder should be having a good time. They are currently enjoying the housing market slump of low prices, no stamp duty to pay (until March) and low interest rates.
If you act quickly you could also reap the benefits of the stagnant housing market. Firstly though, you need to get your foot on the property ladder.
There are a number of ways to make yourself more attractive to banks and lenders. One of which could be to ensure that you make all your bill payments on time and improve your credit history.
Before applying for a mortgage it could be a good idea to see if you could iron out any creases in your credit history, to make you look like a secure investment for brokers.
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Saving for a deposit
First timer buyers who are trying to save for a deposit have a tough time ahead of them. Many are trapped in the private rental sector paying extortionate rates, which eat into potential savings.
Saving is always particularly difficult, especially under the economic pressures that UK households are feeling at the movement. Firstly, you will need to assess how much you need to save and look at what type or mortgage you wish to take out.
Try to be realistic about what you can afford. It can be easy to get ahead of yourselves before you realise what you can afford to save and what you need to spend cash on.
Donít feel that you are alone in the process of saving for a deposit. Your parents may be able to help you achieve your goal financially by releasing equity from their own property. This would allow them to lend you a deposit or act as a guarantor on your property.
Saving is hard, but it is vital that you try to save at least £10,000 to put down a deposit. The typical deposit is around 25% of the value of the property. There are some lenders who will accept a 5-10% deposit, however, higher lending charges are likely to come with this.
If you were to put down a 20% deposit on a property that cost £150,000, you would need to raise £30,000.
In addition to that, there are hidden extras such as stamp duty costs, mortgage fees, legal fees and moving costs. It would be advisable to always save more than you think you need.
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Keeping value in your home
Keeping your home in top shape financially can be difficult as it could easily become an ongoing case of pumping money into new fixtures and fittings.
However, keeping value in your home all comes down to regular maintenance. Making all the necessary repairs and trimming the hedge will keep your property looking pristine and give the impression that the home is well loved and looked after.
Kitchens and bathrooms are focal points of the house that can make or break a sale. Therefore, it is important that you keep them updated and clean.
Falling into negative equity is an unfortunate trend at the moment amongst people who purchased properties in 2007, just before the credit crunch.
As a result, thousands of UK homes are worth less than their mortgages. This is not a significant problem unless you are looking to sell or are forced to sell your property.
Moving on to your second house
Making that next step up the property ladder can be tough, whether itís your second house or your seventh.
It would be advisable to attempt to time your move alongside any positive movements within the UK housing market. There is often a large price gap between first and second homes. According to one price comparison website, the average second home is £48,216 more than the first, marking a massive 32% difference in price.
With house prices continuing to fall, anyone looking to sell and move up a step can expect to take a cut when they sell.
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