Important facts to consider when planning to buy a property in the future. Our lives have totally changed in the last few months and so has the process of buying a property.
Important facts to consider when planning to buy a property in the future. Follow these tips to prepare accordingly when deciding to buy a property in the future.
Buying a property is everyone’s dream to become fully independent and free to change whatever you desire in your home. For some people buying a house might feel like an impossible dream, especially if you are a single person and planning to buy a property in the future, chances to be approved by lenders are very slim.
Currently, we face extreme difficulty because of the pandemic and economic crisis. Knowing that businesses around the world are struggling to keep afloat, we were expecting the housing market to drop significantly, but things happened quite the opposite.
There has been a surge in the housing market in the last few months, despite uncertainty and mass job losses.
What caused a high demand for the housing market in the UK and around the world?
With many people made redundant, going furlough, or working from home, there is a good reason why the property market has seen a spike of interest among buyers. Is absolutely normal to want to have the best comfort even when you live indoors for a long time, especially in an apartment with no balcony.
What started as a quick solution for working during the pandemic, working from home has become something normal for employees at Fujitsu, according to this article from BBC, and many other companies are planning to adopt this solution in the very near future.
Depending on the area where you currently live, there are some important factors that you need to consider when purchasing a house.
Many people are seeing this period as the best ever time to buy a property and that’s because of low-interest fees. Another factor that encouraged people to search for properties on the market in the UK is that the government has reduced the stamp duty.
In order to sustain the economy, the UK government decided to reduce the stamp duty for properties bought between 8 July 2020 and 31 March 2021. See this gov article for reference and more detailed information.
So what factors should be considered when you decided to purchase a property in the future:
1. First of all, you need to have a job, a source of income to prove that you are capable to pay your mortgage.
2. Check your credit scoring and take the necessary steps to improve it if you need to.
3. Have a good deposit. There are so many mortgage schemes to choose from. A mortgage advisor will save you precious time and help find to find the best solutions suitable for your budget and needs. Some will even negotiate the mortgage rates for you.
4. Estimate how much you can borrow, what interest you will pay, and for how many years you will get a mortgage, by using an online mortgage calculator.
5. When exactly are you planning to move into your new home. Take into account the tenancy agreement at the rented property where you live and follow the rules accordingly.
6. The location where you want to buy a house. Do your research and ask online and in-person the neighbors of the property that is for sale. Visit the location a few times to see what’s going on around. Ideal will be at different hours in the day, and late in the evening.
7. Once you decide which property is right for you, a home office is a must nowadays. Keep in mind that the company you work for, might change their system at any time, and giving you the option to work from home is something that can affect the decision of what property to choose.
8. You should start looking for a house as soon as you’ve been pre-approved by lenders. That’s not the case if you planning to buy a house in cash.
9. If you planning to purchase real estate for investment purposes is better to have extra finance on the side. Making a profit from real estate is not happening in a short time, especially if you buy to let and have a mortgage hanging on your back.
10. Add all details in the balance and ask yourself if now is a good time to invest in a property. Perhaps you will never be ready to make such an important step, but eventually, you will have to, no matter what year or circumstance are.
11. Do you wonder if there will be a property crash? Maybe yes, maybe not, no one knows. You are not the only one waiting for the property market to burst. I’ve been waiting for a property crash for years and I’m still waiting, but make the most of this precious time and save as much money as you can.
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We all know that property prices are overinflated and you don’t want to regret signing a contract for a property that cost now, let’s say £250000, when you can buy it in a few years for 30% less if not even more.
It might sound too good to be true, but looking at the current situation, things are not going well at all. Like I said, keep your job and save as much as you can while living in a cheap rented property. Your patience will be well rewarded.
I recommend simulating mortgage re-payments with this online calculator; while you save money, each month you add more to your mortgage deposit. From time to time, revise how much you can borrow and what interest you will pay with this free mortgage calculator.
12. If you wonder what is the best month to buy a house. From my research, late summer and fall seem the best time to buy a house. The statistics from MoneyWise show that in the late summer and fall, there is less competition and you have great chances to find a property for a better price.
13. Don’t forget about the furniture that you need for your new home. You can of course sleep on a blow-up bed, however that won’t do for a long time. There are many stores willing to sell furniture with monthly payments and interest-free for a certain period.
Make a list with all the furniture shops that have this option and contact them for more details to see what’s the best solution for you.
An alternative is to take a loan, or use credit cards for buying the furniture.
Having said that, if you miss a credit card payment, you will have to pay interest fees which will, of course, impact your budget, even if is a small amount. Is wiser to save several thousand along with the house deposit so you can go with everything at once rather than stressing around with loans and credit cards payments.
Either situation you facing, never rely on a single income. Even a small online business can make a difference in your finances. Lenders are more than happy to see that you have multiple sources of income that add up to your total earnings.
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