Buying a house has historically been a good investment and, despite the much-publicized issues in the US Housing Market, purchasing a property still has many advantages.
Taking out a mortgage to buy your first home can be difficult in the current market due to disproportionately high prices to wages, and of course, mortgage costs fluctuate with interest rates. In general, however, mortgages tend to become more comfortable to pay over time as your life circumstances even out and your income is expected to rise.
If you are considering buying your own home, here are a few tips which may be able to help.
Dazzle With A Deposit
Putting aside money for a deposit must be considered a priority. The more substantial deposit you have to bargain with, the more confidence that lenders will have in you, allowing more flexibility as to what they will offer. The issue is, this may take time. It is worth dedicating yourself to watching your spending, and cutting costs where you can to make it happen sooner. With house prices currently levelling off, this may be a perfect time.
It may be an option for you to borrow the money from your parents but many people are uncomfortable to do so. This is because parents may be in the position to release some equity from their own home to provide you with the deposit and for some, this is the only hope of ever raising enough to make it onto the first rung of the ladder. Many parents are willing to do this to help, understanding how difficult it is in the current climate for their offspring to purchase a home.
Get By With A Little Help From Your Friends
Who said you have to do this alone? For young singles, it is becoming more and more popular to purchase a house with a friend by combining your income. In the case of a mortgage, two wages are better than one as many young people do not have sufficient income to do it alone. You must, however, consider the negatives. You will only own 50% of your home, and if, at any time, you were to fall out with your friend, it may make for an awkward living situation as well as a financial one.
Consider a Work In Progress
Consider buying a fixer-upper home and look at your new pad as more of a project and potentially a lucrative investment. One of the biggest pros of investing in a fixer-upper is the price, which should be substantially below the potential value due to it needing work. Another key advantage is the chance make the place your own from the get-go, a dream for many first time buyers. Add to that, if your DIY skills are up to the job you could save a fortune on contractors, though it’s worth taking advice at the start.
Reduce by Relocating
House prices in some areas are much lower than others. If you are willing to relocate, then you can make buying a house a real possibility. It’s worth remembering that you can make a house your home and it doesn't mean a more desirable area is out of reach forever. Just because the housing is cheaper, it doesn't say you aren't buying good quality. It may only be that the more expensive abodes have a closer proximity to a school or other premium demanding amenities. Do your research and be thorough when checking average house prices in different areas.
Buying a house is a huge commitment, so thorough independent advice should always be sought before taking the plunge.