Buying your first property is without doubt, one of the biggest milestones in a person’s life. Whether you’re doing it at eighteen or thirty eight, it’s a no less significant moment for an individual.
However, more and more people are actually struggling to buy property, because of the ten percent deposit that must be paid prior to having a mortgage application accepted. Likewise, if you’re not familiar with the property market in its entirety, then it can seem overwhelming in that you don’t know who to trust, and what to believe.
Today, we’re going to be giving you our favourite top tips for first time property buyers – so listen up, and take notes! It might just help you along the way.
Saving for Your Deposit
Undoubtedly, one of the biggest obstacles first time buyers face when purchasing their first property, is being able to pay for the deposit.
Of course, it never hurts to save traditionally – and if you’re lucky enough to have been gifted a lump sum for a milestone birthday then putting it towards a deposit for a house is a sensible option. Regardless of how sensible you are with money, however, ten percent of the cost of a house is a large amount of money.
Luckily, there are now some government schemes available that will help first time buyers to save for their homes quicker than ever before – and today we’re going to be taking a look at the two main ones.
The first of these, is the Lifetime ISA. These can be used either to save for your first home, or for security money later in life – but you must be between the ages of eighteen and forty to be eligible to open an account of this sort.
In terms of amount, you are able to put up to £4,000 per year into a lifetime ISA account up until the age of fifty – so long as you’ve opened the account before age forty. The great news is, that the government will then add a further 25% of whatever you’ve saved into the account per year – usually a maximum of £1,000.
It’s worth noting that once you turn fifty, you’ll no longer be entitled to the 25%, nor will you be able to add money into the Lifetime ISA. In terms of withdrawal from the account, you can only take the cash out without being penalised if it’s for your first home, you’re 60 or over, or you’re terminally ill with less than twelve months to live.
The issue with the Lifetime ISA, is that if you find a perfect property and have the cash before the twelve month mark from the date of opening the account, you will be penalised for it financially. This makes it great for a long term plan, but can make things difficult if you’re hoping to buy in the near future.
The second account unfortunately closed to new applications on 30th November 2019. This is the Help to Buy ISA, and if you’ve already opened one, then great! If not, then luckily the Lifetime ISA is still available for you.
If you already have an account, you’ll be able to use it to save actively until the year 2029 – and by then you’ll hopefully have found your perfect property! The premise is much the same as the Lifetime ISA, wherein the government will ad 25% onto your savings.
The minimum government bonus in this kind of account is £400, meaning you’ll have to save a minimum of £1,600 into your account before you can claim the bonus. The largest bonus you can receive is £3,000.
Take Your Time
One of the biggest mistakes that first time buyers make when purchasing property, is rushing into it. Our advice would be – take your time, and explore your options!
It is so easy to get caught up in the frenzy of excitement that comes along with buying property – so much so that sometimes people will put an offer in on the first property they view!
Even if you love a property, make a note of it and view others. You need to take a real look at what’s out there to ensure you’re getting the most you can for your money.
Likewise, it never hurts to be open. Sure, have your dealbreakers – but try not to have a set idea in your head of exactly what you’re looking for. Remember that smaller things, you can change, and your own décor can put an entirely different spin on a space.
Save well, and take your time. You’ll not regret it.