Buying your first house is a daunting prospect and you’d be forgiven for not knowing where to start. You may have lots of questions and be in need of some advice – after all, buying your first house means standing on your own feet and budgeting for it yourself. While a small loan helps in financial emergencies, getting together the deposit for a house takes much more time and commitment. To give you a head start, here are some helpful tips to help you budget for your first house.
#1 Work Out The Deposit Budget
Firstly, it’s important to work out your income because you can’t make a budget unless you know how much you have available. From here, you can then budget how much of your income you can spare and begin saving by putting a percentage of your wages away every month into a savings account. This money will be secure and safe and will be able to accumulate until you have the amount you need. Save at least 5% to 20% of the cost of the home you would like and draw up a monthly budget to help keep on track.
#2 Don’t Forget Other Costs
Lots of people forget there are other costs when buying a home. These include; survey cost, solicitor’s fee, removal costs and initial furnishing and decorating costs. Therefore, we recommend that you save for longer than you think and that you work out these costs in advance where possible, so you know how much to save. Ensure to list your household expenses, such as food, bills, and transport because people always forget these too!
#3 Check Your Credit Score
Don’t apply for mortgages before checking your credit score. If you have a low rating, you can increase your credit score by paying bills on time and making sure that you update addresses on bank statements. Paying off credit card debt should also be your first port of call. If you’re prone to taking out credit, lowering your overdraft limit may help you to control your spending somewhat. The above can be really simple ways to improve your credit score but if all else fails, talk to your bank for their help.
#4 Shop Around For The Best Deals
Similar to looking for the best holiday deal, shopping around for the best deals for your finances is important. If you can cut down on your phone contact by having a data limit, or you can reduce any other monthly expenses like subscriptions or high bills, then we recommend that you do it. Change your electricity or water suppliers to save money and try to spend less money each month. Any extra money will really make a difference in budgeting.
#5 Meet With Advisors
Make an appointment with financial advisors at your bank or a trusted savings institution when you feel you are ready. They can tell you if there may be any issues with your credit score and can review your finances in full. In order to make the appointment worthwhile, speak honestly about any debts, student loans, future plans and your current job. By doing this it will enable the advisor to get a full picture of your situation and therefore give you appropriate advice and a guide to help you. After the meeting, you will know exactly what you are working with and the time frame you need.
Buying your first home is a big step and can be challenging, but follow these steps and budget well and you will be a homeowner in no time.