Getting On The Property Ladder On A Low Budget
Getting On The Property Ladder On A Low Budget
Saving for somewhere to live can seem to take forever, especially if you’re on a low budget. In fact, you might believe that it’s impossible for you to get on the property ladder because your budget is so low. There are a few things you can do if you really want to get on the property ladder on a low budget. Here are some ideas to help you finally get to where you want to be:
Guarantor And Family Mortgages
One option you have to get on the property ladder, is taking out a guarantor and family mortgage. However, this can be difficult to obtain, as you need to find somebody who trusts you enough to either put their own home on the line, or fork out a huge lump sum to get you somewhere to live. If you miss payments, then you put your family or guarantor at risk of losing their own place to live.
Help To Buy Schemes/Homeownership Assistance
You also have help to buy schemes and homeownership assistance. It all depends on where you are in the world. With these schemes, you may need a 5% deposit, when the government will then top you up and help you to buy the house you want. However, the deal you get will depend on where you want to buy, and in some cases you’ll only get the best deals on new build homes. You also need to consider that if you come to sell your house, you won’t make much profit on it, if any, as you’ll be required to pay the government back. That being said, help to buy schemes are extremely popular for people on a low income who haven’t got a lot of their budget to spare.
Improve Your Credit Score
Improving your credit score may seem insignificant, but it can help you to land your mortgage. If you have debt and other issues all over it, then no mortgage company will accept you. Take any steps necessary to improve your credit score. In some cases, you might even find mistakes on there that you need to rectify.
Save A Deposit The Smart Way
If you’d rather buy a property the usual way, then you need to save a deposit. But how can you do that if you’re on a low budget? The first step is to know exactly what you have coming in, and going on. You need a good handle on your finances to be able to do this. When you see exactly where your money goes, work out how you can cut back. There are probably at least a few luxuries you can cut back on to help you save up. Maybe you could buy a different brand of dog food, or stop buying expensive meals out every weekend. Give yourself a set amount of money to spend on luxuries, so that you have more left over to save. You don’t just have to cut back on luxuries to get more money into your deposit account, either. You can investigate whether you could be saving money on your phone bill, different insurances, and other bills that you pay out regularly.
If you’re currently renting a place, moving back in with your parents can seem scary. That being said, you will likely be paying much less to them for staying there, and you can put the rest away for a property deposit. If you explain your situation to them and even give them the numbers you expect to save, they might be absolutely fine with you moving back home. Make sure you get them on your side by talking about how you’ll contribute to the house, and how long you expect to be staying for. If it’s not possible for you to move back in with your parents, then you could find a friend with a room to rent. You can also find online platforms that advertise cheap rooms. A shared house will be much cheaper than renting somewhere alone, so see what you can find. If you don’t like the idea of living with others for too long, this could give you more of an incentive to put money away.
Alternatively, if you don’t want to give up your rented space, you could take in somebody and rent a room to them. The extra income could make a huge difference to how much you can save.
Of course, another great way to build up your savings is to choose an account with a great interest rate. This should help to give your savings boost. Just make sure you’re prepared to save up as much as you need to get your foot on the property ladder. You haven’t just got the deposit to think of, but all of the other costs that come with buying your first property. It’s an expensive business, and you don’t want to save up any less than you need. When you have what you need, it’s time to see mortgage advisors for more information.
Be Smart In Your Property Search
You must be smart in your property search. We’d all love to live in a huge 6 bedroom detached house with its own movie room, but it isn’t always possible. Make sure you have a good idea of how much you’re willing to spend, and what properties are within your price range. You can then start your search and look at properties most suitable for you. You can always buy a bigger property if your budget increases later on and you’re sure you can afford it. Just remember that you need to be prepared to stay in your chosen property for a while at first, as moving can be equally as expensive.
Buy With Somebody Else
Buying with a partner, family member, or friend could be an option. However, you need to make sure you have in depth chats with them beforehand, so you know what is expected of you both. This is the time to hash out finer details and make plans. You both need to be on the same page before making such a big commitment.
Anybody can get on the property ladder with a low budget, providing they have motivation and willingness to be patient!