First-time buyers can face a bewildering choice of channels through which they can obtain financial support to make their dreams of owning a property a reality. Making the right decision is key to a smooth and successful process. Here are four of the most impactful ways to get on the property ladder:
Save for a Deposit
An old-fashioned option of securing property is to save hard. Putting away disposable income is an excellent idea when it comes to achieving a deposit for a mortgage, but high street banks are now stricter on what they require before agreeing to mortgages.
However, the more you save, the more chance you will have to secure lower mortgage repayments. Set against all this saving is the need to balance the books of outgoings, so sit down and work out what you can afford.
Bank of Mum and Dad
If all else fails, investors can turn to their families to secure favourable loans. They also can act as guarantors for a mortgage or can even release spare capital from the existing family home to ensure the finances are available. Parents are advised to weigh up the financial costs to themselves regarding potential stamp duty and capital gains tax before committing.
One of the most on-trend options is Shared Ownership, but very few millennials know about or have even researched it. Shared Ownership in its many guises offers the opportunity for workers and their families to buy a portion of a property, while an affordable housing trust owns the rest.
With up to 75% of a property that can be purchased, investors can be earning as little as £20,000 to qualify.
Investors will need to pay a 5-10%% deposit – while the rest of the investment can be tied to a mortgage, of which there are around 20 on the market to take advantage of. You can also combine shared ownership with a friend or partner as long as the joint income falls within the earning bracket. There is also government help to enable the first-time buyer to get on the property ladder.
Shared Ownership property portal Propertybooking.co.uk offers timely advice, information and a diverse portfolio of property across the UK for first-time buyers.
Investors are a resourceful and innovative group, and the opportunity to build a home of their own may well prove tempting if they can first secure a plot of land to build and then handle the stress of financing the planning process, architects, and builders.
Living in such a busy world means the need to sacrifice certain aspects of your life to oversee the project and ensure that all the bills are paid on time, and each phase of the project is completed.
While it can be enormously satisfying, it comes with its headaches, such as reining the temptation to let expenses and timeframes to get out of control. Factor in that you will also have to find somewhere else to live, and probably be paying rent on that, as well as covering any loans you have taken out to cover the cost of the new build.