Steps to buying your own home
Buying your own home is likely to be one of the biggest decisions people ever make. From checking out the flooring to checking out internet speeds in the area, there’s a lot to think about and a large part of the process is getting your finances in check.
Here are some steps to help you get started.
Check your credit score.
Credit reference agencies build information about your financial history and use this info to build your credit scores. Financial companies use the information from the agencies when deciding on whether or not to give you credit.
You can check the credit scores and credit ratings that agencies have for free or for a small fee.
Explore more: What is a credit score?
2. Know what you can afford
Don’t jump straight onto property search sites, but it’s important to take the time to work out how much you could afford to borrow for a mortgage.
If you are not able to meet your repayments your home may be repossessed, so it’s important to be that you’ll be able to afford your repayments – even if your circumstances change.
3. Figure out which mortgage you want
There are several mortgage options and it’s important to find one that suits you based on your circumstances and goals. Types of mortgages:
• Tracker mortgages
• Fixed-rate mortgages
• Discounted variable rate mortgages
• Capped rate mortgages
• Offset mortgages
4. Work out your deposit
A larger deposit could help you find a lower interest rate, at the same time, you may want to hold some money back just in case you want to complete work on your new home.
Other costs to think about in the process of buying a property such as stamp duty and conveyancing.
5. Start saving
Steps to buying. If you have not got all the money for the deposit saved already, put together a plan to save.
Explore more: How to create a budget
6. Get an agreement in principle from your lender
Getting an agreement in principle can tell you what you can potentially borrow.