There are plenty of great reasons to want to buy a new home. If you already own a property, then you might want to find a property that better fits the needs of your family, perhaps the pitter-patter of little feet is a sign that you need more space.
You might also want to buy your first house to get your feet on the property ladder. While renting gives you a place to live, buying a property also provides you with a physical asset that you can sell later down the road or even hand on to your family. Finally, when you own your house, you can decorate it how you like, without needing to consider a landlord.
However, while owning a home is a good investment, it doesn’t come without some hefty costs. Here are some tips to help you to raise money for your new home.
Sell and Buy
If you already own a property, then you have an immediate advantage as you already have a physical asset to fund the new house purchase. Even if you’re upscaling to a larger, more expensive property, selling your existing home will provide you with a healthy deposit and can even pay off part of your new mortgage. You will need to pay off the old mortgage first, however.
Selling a home does add some extra complication, if you can’t sell your existing property, buying a new one can be an added strain. If possible, find a buyer before you commit to purchasing the new property, so you aren’t saddled with two properties that you can’t afford.
Getting a Mortgage
In most cases, you will need to get a mortgage in order to purchase a property. However, most mortgage brokers will check your credit rating before they consider giving you a loan. Depending on your credit score, you can get a large mortgage loan with good interest rates, or something more punishing.
Higher credit scores are, as you might imagine, far better. But it’s still possible to get a mortgage with a poor credit rating. Different lenders have different criteria for whether they will lend to you. It’s often a case of shopping around and looking for advice to help you either raise your credit score or get a mortgage with a poor score.
Budgeting and Saving
Even though the bulk of the purchase might be covered by the mortgage, it’s still important to set a budget and save up for a deposit. Most lenders require a 10% deposit on the mortgage or more in some cases. A larger deposit can net you a better deal and lower interest rates as well, and it means that you can pay off your mortgage more quickly.With this in mind, you might need to spend a few months or a year budgeting your household expenses to raise the money for your deposit. This will make your dream home so much more accessible.