Hints To Help First Time Property Buyers

By: Alisdair Cosgrove

As a first time buyer in the current economic climate it is important to arm yourself with as much knowledge as possible and make sure that you are prepared, as buying your first home can be very stressful and confusing. Whilst the number of first time buyers getting onto the property ladder at present has dropped due to the global credit crunch, falling house prices, and lack of mortgages, there are still some buyers that want to try and get onto the property ladder, and for this group thorough research is vital.

One of the most important factors that you need to consider when buying your first home is affordability, as otherwise you could end up quickly losing your home. There are a number of areas that you need to consider when it comes to affordability. The amount that you can borrow based on your income will vary from one lender to another, and this is something that you need to look into so that you know what sort of property you will be able to afford.

You need to bear in mind that there are many different upfront fees that you may have to pay out when taking out a mortgage, such as solicitor fees, mortgage arrangement fees, and a hefty deposit, and in order to work out whether you can even afford to take out the mortgage you need to determine whether you have the necessary funds available for the upfront payments. On top of the upfront fees you also need to make sure that you can afford the monthly repayments on the mortgage comfortably, as otherwise you could end up losing your home if you start getting into arrears. Go through your income and outgoings thoroughly to see if the repayments are affordable.

Once you are happy with the mortgage deal and the company has approved you for a mortgage, ask for a letter confirming the approval, as this will give you more leverage when you put in an offer on a property because you will already have been approved.

House prices are on the way down at the moment, and therefore to protect yourself from the risk of negative equity you should try and put down as large a deposit as possible. You will also find that in the current financial climate most lenders are asking for higher deposits anyway, even from first time buyers. Also, as a first time buyer you need to bear in mind that it is not just the mortgage repayments that you have to factor into your budget. You will also need to ensure that you can afford to pay bills, pa for groceries, and cover other costs.

If you are concerned about your mortgage repayments rising then you may want to opt for a fixed rate mortgage for a couple of years to start off with, although you should also bear in mind that at the moment interest rates are set to keep falling.

Article Source: http://yourfinance.co.za

About The Author
Alisdair Cosgrove interests include mortgages, loans and other personal finance topics and has been writing for numerous years and can find more of his information at the UK site Glitec.co.uk, offering loans and also a great deals on homeowner loans. Visit Glitec.co.uk today for a great mortgage and loan offer and to read more articles from Alisdair.