If you’re looking at the housing market wistfully right now, as though at a crush you can never have through a rain-soaked window, you need this guide. We’re constantly told this generation isn’t doing enough, working hard enough, for a good enough job, to buy a house, and now that we’re of an age where it’s possible, the housing market is a wreck. We’re going to have to look for any way we can to save money when looking for a house. If you want a home, but also some spending money, you can look up how to trade Forex but be prepared to put time and effort into whatever it is you will do to earn some extra money. Alternatively, you can look at our guide to buying a home and saving money in the process.
Think About Your Circumstances
If you have a few ducks in a row, which are more and more common nowadays, you could be in a privileged position to buy a home that is bigger, but cheaper. Or at least bigger for the same amount of money. The housing market isn’t in a great state – some would say it is in a precarious bubble.
What we mean is to buy a house further from the popular areas of the city. In the past, this meant that anything you were not spending on your mortgage was going into your commute in trying to get to work every day, but with the rise of working from home and just about every office now offering flexible working hours, or hybrid working at least, there is more opportunity for people to spread out. If you’re in a position to keep your job but move further from the city, then do so.
If you have any creative or handy talents, you can also look into a refurbishment project. You can buy a home that has furnishings and styles that are so old that it brings the price down. You have to be someone who doesn’t mind living with one room looking like a total disaster at a time, but if you are someone who wants to leave their mark on their home and give some creative flair to their home, you can buy a home for cheap and replace over years. Spread the cost over time and do only what you can at the moment with the money you’ve saved from buying a cheaper home.
Extend Your Borrowing Power
There is a lot you need to do to now get yourself ready to buy a home. So, even if you’re just browsing listings and feeling wistful, you can make moves to prepare yourself for that biggest buy.
For one thing, you’ll want to work on that debt. Lenders are going to look at your debt-to-income (or DTI) ratio first and judge what they offer you based on how much of your monthly income is going to minimal debt repayments first.
If the debt was easy to wipe it wouldn’t be a problem, but there are things that you can do to make it easier. You might be stuck in a cycle of only being able to afford to pay the interest off the top, never making a dent in the debt, so consolidate it all under a balance transfer card with minimal insurance or pay it all off with a personal loan that you can start repaying to. Make sure that interest doesn’t build up over time by paying off more every month, then it’ll be wiped quicker.
And then there are your incomes. That’s right, plural. Show any income you have to convince your lender that you have backups in case something goes wrong at work. This can be dividends from investments, social security, alimony, child support from a divorce, or any money from a side hustle or part-time job, as long as you’ve been earning regularly for the past two years.
Make Your Monthly Repayments Easier
As an extra tip, double up your mortgage deposit. Most deposits come to 10% of the asking price of the home, however, if you hand over 20% you will forgo the Private Mortgage Insurance (or PMI) that protects the lender when you take out a mortgage.
It’s a big upfront task, considering getting a deposit together is difficult in the first place, but it will make your monthly repayments easier by not only spreading a lower total cost but by missing the insurance price tag.
Go to Auction
Auctions are considered one of the best ways to get a bargain when it comes to buying a house. You avoid lengthy waits, you’re usually buying houses that people need to get rid of quickly and so you’re paying less than what they might accept if they had time to think.
But go in there with a plan. Research the area you’re interested in for auctioneers and arrange a viewing before you go into the auction. Like any other buy, you want to make sure the home is in good condition, so you’re not met with a crumbling building when you buy it.
Gain a copy of the auction particulars and have a solicitor look over them before you commit with your money. Make sure to set a budget and stick to it at the moment. If you’re keen on a property, ask if there’s a possibility it can be sold before the auction, since it can happen on occasion, and it will avoid you spending money you don’t want to.
