After my previous rant about the negatives of living at home
I felt that a sensible, informative but still a little fun post was required
for those planning to fly the nest (and how to do it without getting stung by
the tax/insurance/financial or legal “man”). It's currently IMPOSSIBLE to get an 100% mortgage and the interest rate for 95% is a joke so it's vital that us 20-somethings have at least a 10-20% deposit if we stand any chance of buying. (Feeling the "double-dip" blues yet?)
If you’ve got to the point of finding your “roomie de maison”, your “other half”, the cream to your sugar, the cheese to your toast, the Ben to your Jerry – well you get the idea- then CONGRATULATIONS, you’re at least a tenth of the way there! We've gone back to the 50's where a woman needs a man to give her a home and a baby.. don't worry feminists, it'll all blow over fingers crossed!
Buying as a couple (platonic mate or fairy-tale romance) means you have double the capital and double the borrowing power. As the BF and I have discovered, in the age of reduced lending, soaring interest rates and a stagnant housing market it takes planning, patience, lots of tea, even more beer, phone calls, visits to the bank, delusions of grandeur and an open mind to get closer to the dream of owning your own home.
The following info is what WE have learned SO FAR on our journey to buying our first home in the UK in 2012. Those of a financially nervous disposition look away now; it ain't pretty…
· Your initial calculations – For those cheeky monkeys that up until now have inflated the truth or laughed off the price of how much your new Zara blazer really cost then it’s time to come clean.
Anything you do forget may come back to bite you in the bottom later! Try a budget planner like this one on "Thisismoney.co.uk" or create your own in MS Excel.
· Savings – Work out how much you both have in savings and decide how much you can REALISTICALLY save each month. Don’t leave yourselves completely poor, you still need a life! As my friends and I are discovering, saving is depressing and long and you just want to go out with everyone else on a Friday night so do yourselves a favour and allow a little "fun money".
Invest in an ISA, put into a monthly savings account and try premium bonds (interest rates are so low the bonds may beat the best market interest). Set up standing orders to transfer to your savings account and decide how long you can realistically to save for – the more you save the better! Money Saving Expert has a great review of the best savings accounts here!
· Credit score – EEEK it's the scary bit! Check out BOTH your credit scores using a free online site like Experian. Use their advice to cancel any old payments, register on the electoral roll and ensure you resolve/avoid any missed payments or unnecessary credit checks (they stay on your file and reduce your score!) Again, there is no point in being secretive; if you’re the naughty one then own up to it! I did and I feel all the better for it!
· Financial advice - Contact a Financial/mortgage adviser (You can find a qualified one here!) and find out how much you can borrow (pending a “decision in principal”). It will be a good way to work out your budget, how much you will need as a decent deposit and where/what houses you can afford. They will also summarise the fees, how much you’re likely to pay in your chosen area and keep in touch as your savings increase. THEN you can start the FUN BIT! Woo hooo!
· Houses, houses, houses! - Websites like Right Move, Zoopla and Prime Location are a great starting point to get a view of the market in the areas you like. They show you info, photos, energy certificates (boring yet important for your bills!), the tax band and if you track properties weekly (or daily as most eager house hunters do) you can see when a property has had the price reduced! Zoopla is a great way to track how much properties in the same road, area or the same size sold for so you know if you’re getting a good deal or not. Handy when you are restricted to the penny!
· Estate Agents - Try to be patient, try to be nice, try to not give ALL your contact details (trust me on this one) and above all REMEMBER – they want to make a sale! Obvious I know but when you hear the spiel, look at the pretty photos and get bombarded by calls, emails and even SNAIL MAIL on a daily basis it can make you a little blindsided.
· House Viewings – There are some things to think about when going to a house viewing. Lots and lots actually but for time and blog space I’ve made a quick and dirty list below:
· Book the viewing at rush hour so you see the worst of the traffic
· Get there early so you can take a walk around the property (have a nose at the locals!)
· Once there look at parking, bus train routes, neighbours, road works etc
· Take note of the weather, temp, sunlight, direction of the garden – is it a cold house? Does it let in a lot of light? Do they have the heating on but the windows open? (yes, we’ve seen this in winter so the house seems to be warmer than it is!)
· As you go from room to room think about how YOU would live there? Is it big enough? Could you entertain, study, eat dinner, have children, have guests?
· Look for changes, extensions, repairs, obvious problems, opportunity to extend and how you might work the property to suit your lifestyle.
· Ask about the heating, boiler, are they on a water meter, plumbing, what Council Tax band they are, do they pay a residents fee, do they have broadband already?
· Ask how long they’ve been there, what changes they’ve made, why they are moving (most will tell you), where are they in their chain?
· Confirm what is staying and what they are taking with them. For first time buyers you’d do well to already have an oven, fridge, dishwasher etc.
· Try not to talk about YOUR budget. The most they need to know is you’re not in a chain so are in the best possible position for THEM!
· Ask about the neighbours, schools, public transport, pubs, clubs, parks and nurseries. Whilst you might be a 2 now you may be 3 soon and you want to make sure everything is close by!
· Seriously check out the garden. Whilst you may not be green-fingered yet once you have children the garden will be much more important.
· If you’re unsure or want to know more then JUST ASK! Either ask on the day or call the estate agent if you have any questions. They will be eager to make the sale so it’s likely they’ll find out for you.
· If you are going for a 2nd viewing then take a parent, friend or someone “in the know” E.g an estate agent friend, a builder or a surveyor. Another opinion will be invaluable!
The following sites and blogs are brilliant for advice and tips!
Once you think you’ve found “the one” then the real work begins to ensure you get it. I’ll go through this in my next post but for now…. HAPPY HOUSE HUNTING!