As a renter, I think getting on to the property ladder is so important. Whilst renting can be much more affordable without the up front costs, mortgage payments are generally much lower than rent payments. With renting, that money is being thrown into dead rent, whereas with a mortgage, every payment brings you closer to owning that home completely. It's a goal of mine to get myself on to the property ladder soon. Whether that be buying somewhere small for the short-term that I can easily afford for now, or potentially going for something a bit bigger for the long term with the help of someone similar to a buyers agent on the Northern Beaches.
Either way, I plan on buying a doer-upper as renovating a home is my dream. I've managed to do lots to my current home but what I'd really love to do is just rip everything out and design it myself from scratch. So even if I just bought a short-term home, I would be adding value to it and be in a better position to buy somewhere bigger afterwards.
Here are the things that I'm going to be focusing on over the next 12 months...
A STABLE INCOME
There's a few things that I'm trying to do first so that I'm fully prepared before I start talking to a mortgage advisor. Firstly, I want to wait until we are post-covid so that my income starts balancing itself out again. As a freelancer and being self-employed, I think this is really important because my income is so unreliable so not only do I need a good few years of accounts behind me, but I need things to go back to a bit of normality as covid threw everything up in the air. I had a pretty good idea of my yearly income before covid and it was great but then things hit a wall, understandably, as so many businesses shut down and nobody really knew what was what. I'm hoping to get back to a more stable point by this time next year as that will make things much easier!
MY CREDIT SCORE
I also want to make sure that my credit score is the best that it can be, so I want to pay off credit cards and outstanding debt and I'm now logging my rent payments which will help massively too and show how reliable I would be at paying my mortgage monthly. My credit score is currently pretty good anyway, it's only a few points off the maximum on Experian which is fantastic, but I'm not sure how good it is on Equifax so I'm logging my rent payments with them so they can both be excellent! This should help me massively.
SAVINGS
The biggest and most important thing, is obviously to save, save, save. I opened up a help to buy ISA before the government stopped them so I've been paying into that every month which has helped me start saving up for a deposit. I'm hoping I'll have a decent amount behind me when I start the process as the bigger the deposit, the better. I'm glad the government are going to be backing mortgages with a 5% deposit as of this year though, I think this is so helpful to first-time buyers and anyone like me, who will be purchasing their first home solo.
It's really important to do your research before you delve into buying your first home as it's such a minefield, I'm finding using mortgage calculators really useful so that I have a good idea of what kind of budget I will have to play with and what I'll be able to afford. Mortgagecalculators.info has a great mortgage calculator if you're looking for a decent one to use. Putting in different figures as I go along and then looking into houses around that price is not only lots of fun, but gives me a realistic idea of what I'll be able to buy when the time comes.
Some people plan on getting on the property ladder and then renting it out whilst saving for a second home for themselves. This is a great way to gradually get to the top of the ladder, and a good way to ensure you can get the deposit for the second property is to be under a guaranteed rent scheme. This way, you're able to plan your financial future a lot better. AMS Housing Group offer protection for landlords giving them peace of mind so then you'll always know what financial situation you're going to be in whilst climbing the property ladder!
Do you have any tips for a first time buyer?
