When you step into the adult world, you get a lot of things thrown at you that you didn’t sign up for, and you find yourself doing a whole lot of things that seem way too mature for you, like taking out a mortgage to buy a house. The truth is, when the numbers add up, the less prepared you feel for a mortgage, the better. Hopping on the property ladder early means taking advantage of lower house prices (they almost always rise) and paying off your mortgage sooner. You can begin building equity on any old property and rent it out, so when it comes to buying a home you love, you’ll have plenty of equity to invest.
But did you know that once you’ve chosen a mortgage, there are a number of things you can do to stay on top of it and keep your finances in check. Let’s begin with getting a good deal.
Scoring a Good Mortgage
When it comes to applying for a mortgage the first thing you need to regulate is your credit score. Do you have outstanding debts, do you pay your bills on time, have you built up any kind of credit history? This is the first thing lenders will check, so do your homework and make sure your credit score is acceptable, if not, work on it before applying for a mortgage, or risk getting rejected.
The next thing that will get you a better rate is putting in the effort to save up a decent deposit before hand. The more you can pay up front, the better your deal will be, so consider things like borrowing from family which will be easier to pay back than taking out a bigger mortgage.
It is also wise to take out a manageable mortgage, so only buy what you can afford. If an advisor tells you how much you could borrow, aim to borrow less so that you’ll never find yourself in a dodgy situation if something unexpected occurs.
Maintaining the Best Deals
Finding the best deal on the market is not the endgame when it comes to mortgages as the market will always be changing, and so will your circumstances. After a few years, that sweet deal you originally signed up for will expire, so remortgaging and investing in a new product might just pay off. Be sure to asses things like early-repayment fees to see if it’s really worth it, but often even with this fee, the overall savings will work out in your favor, so never rule out this option without calculating the numbers.
The faster you can pay your mortgage back, the less it will cost you in the long run. The best way to keep your mortgage in check is to rent out some space. Renting out a room in your house can make up most of your monthly repayments, relieving some financial pressure. While you could use this extra money to step up your lifestyle, the wisest thing you can do is pour every penny available into repaying your loan, even if it means making some sacrifices for a little while. If you’re thrifty enough, it won’t even feel like a sacrifice.
Outright home ownership could be just a few years away if you play your cards right.