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Experts say that if you want to get on the property ladder then now is the best time to do it. House prices are slowly beginning to rise. Leave it too much longer and you’ll be paying through the nose. However, get your foot on the rung now and you could make yourself a nice profit when prices rise. If you’re planning on making those daunting first steps then you’re going to need to know where to start. Luckily, we’ve got everything you need to know right here.
The Deposit
Before you start looking at mortgages you’re going to need a healthy deposit to get started. Normally, around 10-20% is what you should expect to pay on a property if you want to keep those mortgage payments low. However, if you’re a first-time buyer in the UK, then there are other options out there. Government schemes have been recently set up to help people like you get on the property ladder. This means you can buy your first home with as little as 5% deposit. Make sure you look into the Help to Buy schemes available, to see how much you should save.
The Property
Once you’ve saved up enough money for a decent deposit, it’s time to hunt down that first property. There are several routes you can go down, depending on how far you want to travel up the housing ladder. If you don’t have a big budget then start small. Look at property auctions for homes that are going to need some work doing to them. Keep an eye out for smaller flats and properties that don’t have a lot of space. They’re not going to be the perfect family home, but they’re somewhere you can improve and make a profit on.
If you have a bit more money to play around with then you can jump up a few rungs. Again, try to keep within your budget for looking at properties that could do with some renovation work. This is the key to selling for a profit when you want to expand.
The Mortgage
Now comes the tricky part. Finding a mortgage. You’re going to want to make sure your credit rating is in good shape before you start hunting around for a lender. You can get a free copy of your credit file to see whether it needs improving. It’s also a good idea to invest in the services of an independent mortgage advisor. They will be able to let you know what companies are likely to lend to you. While also being able to find a lender that suits your needs and budget. If you have a healthy credit rating then you should be able to shop around for the best deal. If not, then be prepared to pay a higher rate than what is offered by high street lenders.
The Fees
Don’t forget the fees involved when it comes to buying a house. These are some of the fees you’ll have to bear in mind before you buy:
- Stamp Duty – Any home costing more than £125,000 will be subject to this government tax.
- Valuation Fee – Most mortgage lenders will want to personally value the property you’re buying. This could be up to £1,500 depending on the price of the home you’re buying.
- Legal Fees – You will need a solicitor or lawyer to carry out any legal work surrounding the property sale. You could pay another £1,500 in fees, plus VAT.
We hope this guide hasn’t put you off making that first step onto the property ladder! It may seem daunting now, but it will be worth it in the long run. Especially when you reach the top of that ladder in your luxury pad.