You need a home of your own

own home

Buying a home as soon as you can reasonably afford it makes sense, given the history of rising property prices in the UK over the last half-century. Since they have tended to rise faster than the increase in average earnings – and at times much faster- the later you climb onto the property ladder the more difficult it will be. If you are interested to purchase land, visit this dedicated website for useful tips.

Buying a house is a big commitment

However, buying a home is a serious commitment and one that you may not be able to get out of easily or quickly. It takes time to sell a house or flat. Even in the most buoyant of property markets, you would be lucky if the transaction went through within four months. But if the market is slow or in decline, it could prove impossible to sell quickly.

Many people in the 1990s found themselves stuck for years in the same property because they had ’negative equity. This meant they had bought their house or flat in the late 1980s when property prices were rising fast, but when they wanted to sell in the 1990s, the price had fallen below the price they paid. For people with mortgages of 80 percent or even 100 percent of the value of the property, they could not afford to sell, because they simply wouldn’t get enough money to pay off the mortgage.

This is not likely to happen so dramatically in the near future, but nothing is certain. So don’t buy a house of flat if it would be a disaster to be stuck there for a few years.

Renting is more flexible

When you rent a home, you lack security, but you do have flexibility. But since paying rent is usually more expensive than making the repayments on a mortgage for a similar property, as soon as you are in a position to buy a home, this is a good option.

Saving up as much as you can to put down a deposit is the best way to start. While 100 percent mortgages are available, the terms on them are not nearly as good as for those where you pay for more of the house yourself. This is because if you have a deposit of say, a quarter of the value of the home you want to buy, then the risk for the lender that it will get its money back if it has to repossess the property is less. You can also visit this website for useful information about purchasing land or an apartment.

How much will a mortgage lender give you?

Before you start looking in estate agents’ windows, you need to know how much you can afford to spend. Apart from your deposit, how much can you borrow?

Lenders will usually give you a mortgage of up to three times your annual gross salary. If you are a couple, they will take other things into account, such as whether you owe any money.

Don’t automatically borrow as much as a bank is willing to lend you. It is much more important to work out how much you can comfortably afford to pay every month. And if you are a be able to meet the payments on just one salary.

There are hundreds of different types of mortgages on the market, and it is important to choose the right one for you. You can save yourself the bother of comparing products from several different providers by using a mortgage broker to find a good value home loan for you. But even if you do this, you still need to know the different types of loan on offer. Furthermore, you can read our articles on this website to know more about Real estate.