Published: 04/07/2024
Working to get your feet on the property ladder in Colliers Wood is exciting, and now could be the perfect time to buy your first home!Of course, there’s a lot to consider, like which area to choose and what type of property to buy in Colliers Wood, but above all else, your budget should be your top consideration.
If you’ve seriously started looking at buying your first property, the Ellisons team have got six budget planning tips for first-time buyers.
6 Tips Any First-Time Buyer Should Know
1. Avoid spending large amounts on rent if you can!
Paying rent every month can be equal to paying a monthly mortgage payment, except you're not buying your own home in the process! We appreciate that it can be difficult to save a deposit for your new home if you’re paying a huge amount of rent each month. But if you are willing to give up your own space for roughly six to 12 months while you save money that you would have spent on rent, you will have the opportunity to become a homeowner much sooner than if you were trying to save money and pay rent.If moving in with family is not an option and you must rent, there are ways to work around this so you can still pocket some money for a deposit. You can look for a cheaper place to live or perhaps a smaller property. You could also consider opting for a house share rather than renting a property on your own to help lower the cost of your rent, giving you extra money to put away for a deposit.
2. Put your savings to work
Why have money just sitting in an account when you could be earning money on those savings? If you have a decent interest rate, you can reach your savings goal faster, but picking the right account is dependent on how you’re saving. If you have money to put aside each month and want to set up regular payments, a standard savings account might be your best option. If you need more flexibility with the amount you put away, for example, if you save in lump sums whenever you can rather than on a fixed schedule, an instant access savings account might be the better option for you.3. Research areas and locations
As a first-time buyer, deciding where to buy your first home is just as important as saving for your deposit. If you haven’t picked the area you want to purchase your new home in yet, do some research to find out what you can afford and if the area fits your lifestyle and needs.You can speak to our expert team here at Ellisons to help guide your choice, and determine which areas will fit your budget. We can help you with the all aspects of property for sale in Colliers Wood and advise you of homes that will suit your budget. Once you have an idea of what the cost of the property might be, you can start to budget and save for a more specific goal. You can also view our Colliers Wood area guide here.
4. Budget for your monthly mortgage payments
Getting a mortgage means you will be required to pay a monthly amount to your lender to cover the amount you have borrowed, so it's vital you speak to a lender or financial adviser to ensure affordability. At Ellisons we will be delighted to assist or recommend a financial services professional. As part of our ongoing commitment to delivering an all round and personal service, we are pleased to be able to assist our clients in obtaining financial advice on mortgages from hundreds of banks and building societies. You can also use our mortgage calculator here.5. Budget for other home-buying costs
There are other costs to consider once you’ve had an offer accepted on your first home, so you should make sure your budgeting plan includes enough to take care of these when you complete on your first property.These other house-moving costs can include:
- Conveyancing fees
- Survey costs
- Buildings and contents insurance
- Furniture and decorating requirements
- Necessary renovations or maintenance
6. Take advantage of 'help' schemes
The government’s Mortgage Guarantee Scheme was originally scheduled to end on 31 December 2022, but has been extended until June 2025. It was introduced to increase the supply of 95% loan to value (LTV) mortgages and to make them cheaper. This scheme sees the government guarantee part of the mortgage, so making it less risky for the lender. A 5% deposit and a mortgage with a participating lender is required to use the Mortgage Guarantee Scheme. The property being purchased must also be £600,000 or less.You may also be interested to read 3 First-Time Buyer Mistakes - And How To Avoid Them!
What Next? Let Us Help You Find Your Dream Home
We hope you find these six first time buyer budgeting tips helpful. It's important to us that your first home move is stress-free!For further no-obligation expert advice please contact the team at Ellisons on 020 8544 0518 or email collierswood@ellisonsuk.com and we will be delighted to help.
In the meantime, we've answered some of your most common questions about buying your first home.