If getting on the property ladder or moving to a new area is one of your top priorities, you’ll want to find out as much as you can about the purchase process. Buying a property is a major investment, so it’s essential to ensure you’ve got everything covered. If you want to make sure you’re totally prepared, take a look at these three things no one tells you when buying a house:
- You Can Get a Mortgage Pre-Approved
If you’re waiting until you find your dream home to get your mortgage secured, don’t. This can waste time and increases the risk of your new home being snatched from under you. Many mortgage lenders now offer pre-approval to house hunters, which means you can secure a mortgage offer subject to certain conditions. For example, a lender might approve your application, subject to you supplying certain documents.
- You Don’t Need to Wait for Your House to Sell
Buying a new home can be tricky when you’re dependent on the capital from selling your existing property. If you wait until you find a home you love to put yours on the market, there’s a possibility someone else will snap it up while you’re waiting for offers to come in. However, if you sell your own property but can’t find a new home you like, you may be forced to decline the offer or move into temporary accommodation.
Fortunately, there is another option. With bridging finance, you can secure a short-term loan to finance the purchase of a new home. Although you may not have heard of bridging loans before, it may be that in-between option to help you move. Once your existing property sells, you use the equity to pay off your bridging loan and take out a mortgage on your new property, if you need to. Obtaining a second mortgage can be difficult, depending on your income, but bridging loans cover the gap and enable you to move forward with a purchase, even if your existing property hasn’t sold yet.
- You May Not Need a Large Deposit
Most people assume that you need to put down a significant deposit in order to secure a mortgage, but this isn’t always the case. First-time buyers can often finance a property purchase with a deposit of just 10%. While a higher deposit can mean securing a lower interest rate, obtaining a 90% mortgage could be cheaper than continuing to pay rent and may enable you to get on the property ladder more quickly.
Additionally, there are a variety of schemes aimed at key workers or people on low incomes which help them to finance a property without having a large deposit. If you’re eligible, this can be an effective way of purchasing a new home, even if you don’t have access to a substantial deposit.
Getting to Know the Market
Unless you buy and sell property regularly, you’ll want to do some research before you consider buying a home. By getting to know how the market works, you can avoid the pitfalls, safeguard your investment and find the perfect property for you and your family.
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