You’ve worked hard for three or four years at university and your degree is in the bag. You’ve even secured your dream job and now you’re planning your next step; getting your foot on the property ladder.
If renting isn’t for you, and you’d prefer to invest by buying your property outright, this guide is designed to help you make those first property buying steps.
Utilise your savings
If you were fortunate enough to save money during university, you could use these savings to get your foot on the property ladder. From funding solicitors and surveys to covering deposits and furnishings, any savings could go a long way when purchasing your first home. If you’re lucky enough to have them, use them wisely with a big move like this, as it will serve you very well in the future.
How much do I need for a deposit?
Typically for a deposit, you’ll need between 5% and 20% of the cost of the home you’d like to buy. For example, if you’re looking to buy for £150,000, and want to save a 5% deposit, you’ll need £7,500. It’s best to save more, if you can, so you’ll have a wider range of mortgages to choose from.
Getting a mortgage
How much you can borrow will depend on your financial situation and how much you require. The mortgage lender will take into account what kind of mortgage you want, and how long you want it for. They will then run checks on your credit history, finances and ask about any future plans that could impact your income. More often than not, paying a mortgage is cheaper (on a monthly basis) than paying rent, especially if you’re renting in a sought-after area. Saving money by getting on the ladder seems like a win-win situation!
Budgeting for other costs
The cost of the house isn’t the only cost associated with buying your first property. You’ll also need to consider potential costs for the following:
- Survey costs: a survey is designed to check everything in your house is in working order before you commit to buy. You should choose a survey based on the condition of the property itself, rather than the cost of the survey.
- Removal costs: it might sound like an obvious one, but you might need to hire a removal van or company to move any property from your existing home.
- A specialist solicitor: a solicitor will help you get to grips with all legal aspects to consider when buying your first property. This minor expense could help save you thousands in years to come.
- Buildings and contents insurance: it’s important to ensure you have the appropriate insurance should anything happen to your home.
- Furnishings and improvement works: you will most likely need to purchase furniture for your new home, or even make home improvements or maintenance.
But good news, assuming as a graduate you are not buying your first property for more than £300,000, you will not be required to pay Stamp Duty.
If you’re ready to purchase your first property, take the first step and get some professional advice in the form of a first time buyer solicitors. They’ll also be able to give you a heads up on all the legal aspects affecting your home, and carry out property specific searches to make sure you are making a good investment.