Entering the real estate market for the first time can be a very daunting experience. With housing prices on the rise and limited financing options, firs time buyers may feel overwhelmed. However, you should start with calculating your finances and assessing your budgetary constraints. The analysis will help you decide what you can spend and where you will need to save.
You should keep in mind your needs and requirements when it comes to selecting a property. If you have a small family, you should look into a house with the appropriate number of rooms (perhaps an extra room or two if you expect the number of family members to increase) along with a suitable location. Along with having easy access to transportation facilities, the location should be safe and convenient for all family members.
You should also seek help from friends and relatives who have prior experience with buying and selling. They can easily link you to reputable builders, sellers and lenders, who might offer incentives if you have a strong reference. You should also look into housing schemes, which often have more affordable properties on sale. However, most housing schemes are located in remote areas and you will need to consider the location before you make your decision.
When taking out a mortgage to finance your house, you should consider the initial deposit you will have to submit. 100% mortgages are no longer available and sellers usually ask for 10-15% deposits. The higher your initial deposit, the more money you can borrow on your mortgage. You can also take financial help from your parents, and name them as guarantors for your mortgage. Guarantors are contacted by the lender if you default on mortgage payments.
Another way to finance your house is to buy it with a family member or a partner; however, there are several issues you need to consider in such a scenario. Buying the property along with another person has implications when either of you decides to part ways. In case you purchase the house with your partner, an agreement needs to be drawn up to stipulate conditions in case of divorce or separation. Both of you will be liable for joint mortgage payments, and even if one defaults, the other will still be responsible. Moreover, if you are purchasing the property with a family member, it is likely that the two of you will move out in the years to come and an appropriate agreement needs to be drafted for such a case.