- for all the things they didn't teach us at school about it...
Buying a house is one of those things you don’t really think about when you’re younger… well maybe you do!? I always knew I wanted to be a homeowner but I never really thought how much money you need to save to get there… man I WISH they taught you these things at school. All that useless maths I learnt at school, for example, Pythagoras’ theorem. I don’t remember any of that! If only they taught us about saving flipping dollars and how you can get a mortgage!
So anyways, looking back at my years of having my first job I thought it was brilliant, I could buy new things from Jack Wills and Topshop and hell yessss could I go out for a drink or dinner and not worry. I was working hard and earning money. Now the bit I didn’t really think about… the saving part!! – Let me just say my advice to anyone reading this who wants to be a homeowner is to start looking at ISA’s now and start saving. Especially the help to buy ISA and Lifetime ISA. Annoyingly I was too late for this help, plus being based in Cambridge it was hard to find anything below £250k, but these ISA’s look pretty swanky the fact that the government tops them up when you’re ready to buy is just free money! If you’re interested in new-builds and you’re to late to do the help to buy ISA, look into Help to Buy schemes. I think all new builds have the scheme basically you put down 5% and government tops up 20% for your deposit. I have done quite a bit of research and it seems like a pretty good scheme as long as you plan on paying back the 20% ASAP. Or you can pay back 10% and remortgage for the other 10% a few years down the line. You want to do this as soon as you can as when your house goes up in value so does the 20% you owe. So your best bet is to pay it off quickly before the house goes up in value too much!
Hopefully, this blog post is going to be more useful than all my wasted maths lessons! So here is what I learnt while going through the process. Just a disclaimer, I’m not pro at this but I can hopefully help you out a bit!
So we weren’t sure if we were ready to buy yet, or if we could even afford to buy! But this year we decided we would just start looking at properties. My number one hobby is sitting on rightmove looking at dream houses. I was now editing my search
a bit a lot, and lowering the price range, and soon Michael and I booked to view a few.
You may think you know what you want in a house, but until you start viewing them you never really know, especially if this is your first time viewing houses. I remember after every house I would be like it’s PERFECT! even if it wasn’t, because I was just so excited we might actually be able to buy. We decided to view a bit of everything, and then we found the perfect house. Later we got my dad to come to view it too just to be sure it was the right decision. Sometimes you need that approval from a parent! While we were looking we got in contact with a mortgage advisor, YES that hella does sound scary! My best advice is to ask your parents, aunties, and friends who they use. We were lucky and had a family mortgage advisor who always dealt with my family. So we started making enquiries about mortgages too… man does that sound scary!
My basic understanding of mortgages:
There are a few different types of mortgages. There’s a repayment mortgage, an interest-only mortgage and buy to let mortgage. If you’re going to live in the property you don’t need to worry about that buy to let one. Buy to let mortgage is pretty self-explanatory and is for if you’re planning on renting your property. An interest-only mortgage is one where you only pay off the interest on the house price that you borrow. When you sell the house you pay of the full amount you borrowed. If the house has gone up in value since you will keep the difference. These mortgages seem harder to get nowadays and they are quite risky as property value can go down which doesn’t leave enough for you to pay off the mortgage if you had to sell. I think these were a lot more popular before the big crash we had years ago and now lenders are a bit more careful. Lastly is a repayment mortgage, where each month you pay off a set amount which slowly reduces the amount you owe. We went for a 5-year fixed interest mortage meaning we pay the same interest rate for the next 5 years. We felt this was a safe options due to brexit and no one knowing how will affect interest rates.
I hope this has helped you and given you a bit of useful information. Good luck! Buying a house is so stressful but 100% worth it in the end. I just wish I had started saving sooner!