Buying a house is incredibly important for most families. It is a much better idea than renting, as purchasing property is an excellent investment for the future. Not only that, though, but it gives you a great family home that you will be able to make your own! If you buy the right house, and take good care of it, you will find that it slowly increases in value over the years and will keep you in a good financial position. Plus, it will also be a great piece of your financial portfolio to pass on to your children once you have gone. Lots of people buy a home so that their children’s inheritance is secure.
However, there is always one major downside to buying a home. And that is the huge price! Over the past few years, property prices have been steadily rising, and now they are at an all time high. It doesn’t help that the economy hasn’t been doing so great in recent years and that there have been few wage rises in various industries. So now it looks like the dream of buying a house is out of reach for most families.
But all is not lost, though. You shouldn’t just give up on your dream of owning your own family home just because of the current poor economy and inflated house prices. In fact, there are many things that you can do to make buying a property a very firm reality. You just need to make sure that you are on top of your finances, and that you are careful not to make any mistakes that could land you in significant debt. Are you and your family interested to know how you can do exactly that? Here are our fantastic tips for keeping your bank balance healthy when buying a family home.
There is only one way you will be able to figure out whether or not you are in a good financial position. And that is to budget efficiently. It is very important that you take a look at your finances and see how much you have coming into your household on a monthly basis. Then should figure out all of your usual monthly expenses. Once you know these figures, you will be able to work out how much you can afford to save each month towards a deposit. If you feel the need to, plan ahead for a few months and detail how much you can afford to spend on frivolous purchases as well as how much you will save each month. If you stick to this, you will find that you won’t go over budget, which can help you save for a deposit without getting into debt.
Research Your Mortgage Options
There is a huge range of mortgage lenders out there. You could visit your bank and ask them about their mortgage options. This is the traditional way of getting a mortgage to buy a house. However, over the past few years, there have been a few more specialist firms enter the market. These offer people jumbo loans that they can use as a mortgage. You will need to do your research into these if you decide to go down this route. There is a lot that you will need to consider, including jumbo loan rates. It is important that you try and find a loan that doesn’t have too high an interest rate. Otherwise, you will end up paying back a lot more than what you ended up borrowing. And that won’t do your finances any good at all.
Work On An Emergency Fund
Unfortunately, the property isn’t the only thing you need to save up for when you are thinking of buying a house. There is a lot of other bills and expenses that you might be shocked to hear you are going to have to afford each month. For instance, increased utility bills, garden maintenance, and home repairs. There are also some expenses that you will need to pay when you buy the home, such as a property survey and legal bills. It is important that you can afford all of these additional expenses before you jump straight in and buy a home. Otherwise, you could end up taking out additional loans to be able to pay all the costs and fees. So that is why it is crucial that you work on an emergency fund. Every month, you should carry on paying into this so that you can build up a large sum of money that you can fall back on to help you when you are sent an unexpected invoice or bill.
Work Out What You Can Afford
Once you have established how much you can afford to spend on a house, you need to figure out the kinds of property that the sum will get you. It is very important that you sit down and figure this out before you start to view properties. Knowing how much you can spend will give you an idea of the types of property you can start looking at. If you view properties without knowing your budget, then you will probably end up getting carried away with yourself and looking at homes that you just can’t afford. However, because you haven’t considered your budget, you won’t know that you can’t afford them until it is too late. And by then you might have already had your offer on the house accepted and will find yourself trying to get a mortgage that you just can’t afford. So be sure to do your research on what you can afford before you start house hunting!
Use Government Schemes
Because it is so difficult to buy a house these days, the government has come up with a few different schemes and programs that can help first-time buyers get their feet firmly on the property ladder. These include bank accounts that have a very high-interest rate. The high-interest rate will help your money in the account grow quicker so that it is slightly easier to save up a sizeable deposit. There are also some cases where the government will match some of the payments you make into these bank accounts for first-time bankers. It’s not just governments who have special schemes for first-time buyers and young families. Many banks also offer specialist mortgages as well. These are easier to get and have fewer criteria that applicants need to meet. If you apply for one of these and have a special first-time buyer bank account, you will find it incredibly easy to get your first home!
Get A House Survey
Many people are put off from getting a property surveyed because it can work out quite expensive. However, it is very much worth getting a property surveyed before you decide to buy. It will save you a considerable amount of money in the long run. The whole point of a survey is to make sure that there are no hidden issues with the home and its structure. If you don’t get a survey, you may end up buying a property that has some severe structural damage that you didn’t anticipate. And the bills to get this repaired could be a whole lot more expensive than the survey. So, as you can see, even though a survey may seem expensive in the first place, it will save you a lot of money and stress in the future!
Don’t Forget About Homeowners Insurance
It is important that you also save up enough cash for home insurance. Again, this is like the property survey, in that it will save you a lot of money in the long term. Sure, it may seem very expensive in the first place, but believe us, you will easily fall into debt if you don’t invest in insurance and then have to repair some expensive home maintenance. Home insurance will cover you for a variety of different issues. Most policies will cover the contents of your home. That means if you are ever burgled you will be able to claim for the value of any expensive items that were taken. Almost every insurance policy will also cover the property’s structure. So if there is ever any significant damage to the building, your insurance company will payout to make sure that you can cover the costs incurred.
Try Not To Buy New Furniture
One of the most expensive things about buying a new house is being able to furnish and decorate it yourself. However, there is one downside to this: the expense! Rather than slipping into debt after furniture shopping, it is a much better idea to look for second-hand furnishings. This will work out a whole lot cheaper for you. You can then start to replace them once your bank account has recovered after buying a house! It could be worth asking your friends and family to see if anyone is trying to get rid of old furniture.
As you can see, buying a house isn’t totally out of reach. You just need to watch your finances!