Many people dream of being able to get onto the first step of the property ladder. However, over recent years, many younger people have found it increasingly difficult to get onto that all-important first rung. While some people decide to rent instead, this is considered by many as dead money over the long-term, since you are paying down someone else’s mortgage rather than your own.
With this in mind, it is little wonder that so many people are desperate to take the plunge and get their property. However, you have to remember that failing to keep up on repayments on a property means that you could end up losing it eventually. This factor and the fact that your home is likely going to be one of the most significant financial investments you will make is why you need to be adequately prepared in terms of your finances and avoid making any rushed decisions. Let’s look at some of the critical financial factors you need to consider before you buy your first home.
Your Total Income
Before you even start considering purchasing your first home, you need to take stock of your financial status and position. You should obtain a copy of your credit report so you can look at your credit score. Besides, you need to look at how much your total monthly income is. Remember, if you are moving with a partner, you should take both incomes into account and know your combined income.
Your Current Regular Outgoings
Once you have worked out your total income, you then need to consider any regular outgoings you have. The outgoings could be things such as car insurance, debts that you are paying off, mobile phone bills, and other regular payments. You only need to look at the payments that will continue to come out once you have purchased your first home.
If you have never rented or owned your own home before, you may not be aware of all the outgoings you may face. It is essential that you find out more about future outgoings that you will have to cover if you move into your first home. The expenses include things such as home insurance, life insurance, the cost of groceries for your home, utilities, broadband, and other services that you will need to pay for.
Monthly Mortgage Payment
Another thing you need to do is get online and find out how much you can afford to borrow based on your income. By doing this, you can get an idea of what sort of monthly mortgage payment you might be looking at. You can then add this to the other list of outgoings to get an idea of what you will be left with each month once all payments have been taken out of your account.
You should also speak to financial experts or go online to find out what sort of deposit you will need in order to get onto the property ladder. Naturally, the more of a deposit you can raise, the better it will be in terms of your mortgage payments as well as your chances of getting a mortgage.
Get Valuable Advice from the Experts
As you can see, there is a lot to consider in relation to finances if you are considering purchasing your first home. The good news is that there are experts available to help. If you would like to get valuable professional advice, get in touch with the team at Rands Financial Services about home loans. Whether it’s the first home to live in or investment property, we will be delighted to assist you.