Buying Your First Home
Buying a home, especially your first home, can be a daunting prospect and usually the most expensive purchase, before moving up the property ladder again! Whilst it is daunting, it is also one of the best ways to invest your cash.
In a relatively recent article, (Real Business, on property investment) property is again an attractive investment. They say “For the first time since the recession hit, professionals are once again investing in bricks and mortar, which is a good indication of property still being a sound investment.”
First of all key points:
Set a Budget
Spreadsheets will help to work out your expected outgoings v incoming salary.
Bills including electricity, gas, water rates, council tax, TV (Sky etc). Living expenses such as food. Lifestyle such as gym memberships, clothes, cosmetics, nights out. Of course the latter is flexible and may be subject to some pulling in of the reigns!
Apply for a Mortgage
Many prospective home buyers will go and view properties without having been agreed for a mortgage. You will get far more help on providing the estate agent with proof that you are able to get a mortgage and for what amount. These people work on commission of house sales, so if they know you are 100% able to move forward – without a chain – they will commit more time to you.
Set Your Criteria:
It may just be you and the cat, or maybe you and a spouse…but think long-term re children, and pets. Moving into a house that is comfortable now, may not be several years down the line. Moving house again will be an upheaval and whilst most people do move up the ladder, it is a stressful event; not one that you will want to feel pressurised to do. Furthermore, if you end up working for yourself, it can be difficult to get another mortgage. It’s amazing how many people become self-employed after having children.
Other considerations, again looking to the future: If you have children or plan to do so in the future, look at the local schools, swimming pools, parks and so on. Think about the environment that you want children to be brought up in.
Gardens are wonderful but time-consuming. A large garden, whilst being an asset, can also be very demanding in terms of man hours required to keep the garden tidy!
Found a House – Get a Home Survey!
The mortgage lender will arrange for a valuation to be carried out. This valuation survey indicates what the property is worth but it will not necessarily describe its condition. The valuer doing this work doesn’t necessarily have to tell you about defects.
Home survey reports give you an idea of the general condition of the property, and also drill down to issues. These reports will indicate any serious defects, provide you with details of future expenditure accordingly.
Faults in buildings are very common. Crucially some are serious and can worsten, for example settlement or structural movement. This will devalue the property. Some faults could turn into to bigger problems in the future, such as rising damp causing timber rot. Others may be serious but repairable at a cost. These type of issues are not always apparent and visible to the layperson.
It is also wise, once moved in to commission an asbestos survey. Asbestos is most dangerous when it is disturbed or moved. Asbestos is hidden everywhere – they even used it in gas masks before the dangers were realised!
RICS publish several home survey guides to help you decide which survey will be the best for your potential future home.