Affording the First Rung of the Property Ladder

By: Isla Campbell
Submitted: 2008-09-30 00:05:10
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With so many hidden factors and pitfalls awaiting the first-time buyer, buying a property can be a daunting prospect. However, there are steps which can be taken to ensure the process runs as smoothly as possible.

The best thing any prospective first time homeowner can possibly do is research. This involves researching everything you can think of, from the process and procedure of home buying to mortgages, market trends, insurance and loans. Learn the jargon - do you know what 'fixed rate' means? How about gazumping, conveyancing and equity? Knowing these terms and their implications in the property market could make all the difference to how straightforward your first time purchase is - so start doing your research.

Finding the right property for your first home is a long process that doesn't necessarily depend on the property itself as much as mortgages and various hidden costs do. It's a frequent occurrence that many first time buyers end up disappointed when they fall in love with a property only to discover that they cannot obtain a mortgage that will cover the costs. Not only is this disheartening, but it's a waste of time - so you're better off avoiding it entirely and thinking about purchasing your first property in a more efficient - and realistic - manner.

Rather than finding a property and trying to work your costs around it, it's far more prudent to make prospective homes work around your expenses. This means that you'll only ever look into houses you can afford and thus will avoid both disappointment and wasting your time. But how do you know what you can afford?

Unfortunately, working out your budget is a time-consuming process - and one that leads to another process that is similarly lengthy. You'll need to set aside some time to thoroughly work out your expected outgoing weekly, monthly and annual costs. These can include such items as food bills, TV license, car payments, pet costs, gym memberships and so on.

Once you've made records of all of these, you can start shopping around for better deals. Many people don't realise just how much they could be saving by switching insurance companies, joining a different gym or changing broadband providers. You could end up saving a substantial amount by finding the cheapest deals on the market, meaning you can afford a better mortgage.

After sorting out your fixed outgoings, you can then work out what you can afford to pay in regards to your new property by way of mortgage, home insurance council tax and utility bills. Find out what council tax band you can afford and don't bother with any properties that are above it. For a rough guide, ask sellers what they pay and use it along with your own calculations to work out whether the property is within your budget.

Having completed your preparation and sourced the best deals on everything you'll need to be paying on a regular basis, you should know exactly what you can and cannot afford, making the final step of actually buying a first property that little bit easier.

Article source: Expert Articles