Tuesday, January 24, 2017

Don't Slip On That First Rung Of The Property Ladder

Most people will spend the early years of their twenties renting property. Then, once they build up a solid income, they will jump on the property market ladder. They’ll be looking for their first home, eager to claim a part of this world as their own. It’s one of the last steps into adulthood really, and it can be quite exciting. But you also need to remember that owning property is going to be considerably different compared to renting. It’s such a contrast that at first, you might find handling it a struggle. But fear not because eventually, everything will fall into place. Let’s look at a few of the things that are different when you buy your first property.


Fixer Upper

When you rent property, there’s an excellent chance that you get a place with no problems at all. It will be perfect because the landlord has a responsibility to provide a good quality of living. The insulation will keep you warm through the winter months, the boiler will never falter. If any area of the property has been damaged, it will have been properly repaired and taken care of. That’s not going to be true for the first home that you buy. It’s possible and maybe even likely that it’s a bit of a fixer upper. Why? Well, that’s probably the only type of home that you’re going to be able to afford at this point. As such, it could have a lot of issues that you might not be prepared for. You might find that the insulation isn’t up to scratch. Instead, it’s an old home, and the sealing around the windows in some of the rooms has broken.

Or, perhaps the old owner has completed some DIY work to improve the house. But, it wasn’t to a high standard of quality, and therefore, it’s actually left it in more of a mess. Anyone of these things is a possibility that you need to be aware of. There are two issues here. First, there’s the cost. You are going to find it quite expensive to get things in order and up to a quality of living that you’re used to. Then, there’s the difficulty of completing the work. Will you do it yourself? Or, should you hire an expert? In most cases, an expert is the best option, but that adds yet another expense to the equation. One thing is for sure, a landlord won’t be there to handle this issue for you.


Payment Problems

There’s another problem with cost and money too. You need to think about how much your home is going to cost in mortgage repayments. Don’t forget, mortgage repayments are not like paying rent. Firstly, they are probably going to be significantly higher. In fact, the average mortgage repayment is usually around double what you would pay in rent per month for the property. So, straight away there’s increased pressure on your finances. Mortgage repayments can also fluctuate, and the amount you owe can easily grow. That’s why some people struggle to stay on top of their repayments. Instead, they fall behind, and this is the last thing you want.

By falling behind on your repayments, you will damage your credit score. This determines whether you can borrow more money. It will also alter your chances of being able to readjust your payment scheme when or if it is necessary.

The best option here is to always make sure that you pay it on time, no matter what. You can do this by either saving more than you need or borrowing to get by. This is where payday loans can prove useful. Payday loans are designed for people who own property and can afford to borrow while being able to pay it back at a later stage. You can guarantee your mortgage repayment is dealt with on time without any issues at all.

Make sure you understand everything you need to know about repayments when you arrange your mortgage. Remember, there are different types that will have an impact on how easy you find paying for the home. In some cases, the interest can be frozen for the first few years. But, you must understand what happens after that time runs out. You also need to know how much you’ll pay if you don’t keep up with your repayments. All these issues should be discussed before you buy the home.


Bills, Bills, Bills

The good news about bills is that you’ll have more control over them when you buy property. Usually, when you’re renting you’ll be tied down to a particular energy provider. They may not be offering the best rates on your energy but you have no choice, and you have to stick with them. When you buy a home, you can compare and contrast the different rates on the market. By doing so, you can make sure that you get the best price. Don’t forget, it’s very easy to switch your energy provider from the current business. Call up the company you want to start buying from, and they will arrange everything from there.

However, that doesn’t mean you’re going to find it easy to pay your home bills. It’s possible that they are going to be a lot more expensive than you first thought. The reason for this is simple. The home that you’ve bought is probably bigger. Therefore, it takes more energy to heat. You might also have more appliances and accessories. For instance, you may not have had a bath in your rented property, but you do now. If you love baths, that’s definitely going to push up your water bill.

The best thing to do is make sure you set up your new home to conserve energy. There are lots of different ways to do this. When you’re kitting out the property, make sure you only buy green appliances. All electrical equipment that you can purchase has an energy rating. Anything less than an A isn’t worth the cost. You might find that tech with the best energy rating is more expensive. But it will be worth it due to how much you can save on your bills.

There are other improvements you can make too. For instance, depending on your area and your energy company, you might be able to get a smart meter. A smart meter will allow you to keep a constant check on how much you’re spending on energy. Without this, your energy bills will be estimates, and this can make them more expensive.


Home Improvement

Finally, when you buy a home, you’ll have the choice to change it however you like. As they say, with great power comes great responsibility. You need to make sure that you don’t go overboard here. There are plenty of people who buy a home and then spend a fortune turning it into their dream place to live. It might seem like a good idea, but it isn’t. Not when your finances will already be under pressure after buying a brand new property.

That said, you do need to make improvements to the property gradually. This is going to add value to your new home and transform it into an investment rather than a typical purchase. You can make sure that when it is time to sell the home, you make some money off it. Be sure to check out some of the changes that will add the most value to your home. Even spending a few thousand over a couple of years will be worth it due to the impact it could have on the price of your property.

xoxo,
Therese

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