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Buying your first home: Getting started

13 May 2018

So you want to buy your first home. Get on the property ladder. Quit paying someone else's mortgage. But you haven't got a clue on how to get started? Join the club mate.

As some of you have read my on-going sagas (and general moaning, sorry about that), Matthew and I are finally (and hopefully) in the position to buy our first home this year.

It's not been an easy feat - that's putting it lightly - it's been a fucking nightmare at times, mainly because you're stumbling around in the dark, eating avo on toast, being the millennial you are and wondering how the fuck you'll do this.

I might be somewhat closer to being a home owner than I was when I started and I'm most certainly not an expert, but here's what I've learnt so far.

1) Know your shit 

When I first started saving I was putting money aside into an ISA and was pretty clueless at how this whole buying a home lark worked. However as that ISA got pretty chunky, it was time to get in the know.

I booked an appointment with my bank (Natwest - yes, I will name and shame) to suss out my options and basically live in the hope that they would tell me everything I needed to know about the world of mortgages. This was in-fact a complete waste of Saturday morning. They simply waffled on about how I should come back when I had it all figured out and had that big ol' chunk of cash saved (with them, of course). Right.

This led me onto becoming the ultimate Martin Lewis fan girl. Yes, that fella off morning tv who's otherwise known as the money saving expert. Well Martin and his expert ways were indeed super helpful with his first time buyers guide - a pdf bible that literally tells you everything, I mean everything you need to know.

Buying a home is *probably* one of the most expensive purchases you'll make in a lifetime - so put in the boring homework and (yes - grumble that they never teach you this shit in school) be glad you are now officially a master of mortgages.

2) You do you

I cannot stress this enough - look at your options. Do not get fazed by others (however tempting) and don't get a sulk that others have it easy, cos that's life - it ain't fair.

I totally sulked.

You might be stuck in the cycle of renting where you'll struggle to save the big bucks - but you're still game. That's cool. You got this.

You might live at home with your parents (like me), pay half the rent you would spend elsewhere and be in a better position to save a little bit more each month. That's great.

You might be super lucky to have a relative cough up your deposit for you - and guess what? That's super epic too. We've all still got the same end game.

What you need to do is get real. It might be a bit slower for you to save than others, it might be quicker. But you'll get there. Even if you are a basic millennial with no hope in the world. You will.

3) Suss out the options available 

There are many government schemes available to first time buyers - which is great news hurrah - but it's also a sodding nightmare to work out if a) it's applicable to you b) how you go about it.

For a starters there is the Help to Buy ISA where you get a decent rate of interest tax free and the government will award you with up to a £3k bonus. Perfect if you are looking to start saving now but aren't in any rush to buy. Just check the small print as for me the price of a property that I want to buy where I live is too expensive to take advantage.

Then there shared ownership mortgage - this is where you buy a percentage of the property, say 75%, and then pay rent on the remaining 25%. Then later on you can choose whether to purchase the remaining share. This is a great option if you are unable to save a hefty deposit. But when you come to sell, you won't of course have as much equity.

Finally there is the Help to Buy scheme for new builds, whereby you only have to put down a 5% deposit on a property and the government will loan you 20% additional deposit. Again, it's worth reading the small print as you will have to pay interest on this loan and when you do sell, you will have less equity (profit) as the idea is, you will pay the loan back when you sell.

It's worth reading up on the government website which actually does a superb job of spelling everything out.

Personally, we decided that the schemes above weren't applicable to us and we cracked on with trying to save the most amount of chunkier deposit we could, in the hope that we will be financially better off in the long run.

4) Get your finances in order

Before you begin stashing away all your precious pennies, you need to have a hard look at your finances. Open up a google sheet (the free online version of Excel) and list all your monthly outgoings. The necessary and the nice treats. Then be honest with yourself. How much can you put aside each month, being completely and utterly realistic.

I plan to dig into this in a future post, the nitty gritty of saving but you need to make sure that you 1) aren't living on the bread line because you're unrealistically saving too much money 2) or the opposite, where you're just being a bit half arsed.

5) Set a goal 

Life can throw up some serious plot twists and speaking from experience (hello redundancy), it can be really hard to predict what will happen in the future, to you and your finances.

But it helps to have a tracker / goal in mind. You should have a basic idea of how much deposit you should be aiming to save.

For example, the most affordable houses in my area that I wish to buy in are £300k minimum - this means I need at least £30k min deposit. Then you need to factor in fees. And then perhaps more as the bank might not loan you the rest - thus meaning you need an even bigger deposit.

How someone saves £30,000+ british pounds to purchase a house is again a mystery to me, but it is slowly happening because I have been saving for Y.E.A.R.S.

Again this is where you have a monthly tracker (on google sheets, trust me you will be a convert) and you will soon see how quickly your savings begin to add up and how motivating that is.

So motivating, it doesn't even hurt that bad when you click out of the ASOS binge that was so close to checking out.

There are my five wordy tips on how to get started. Have I made any mistakes, am I missing something obvious or got any tips? Tell me, I'm not an expert so would be great to hear your feedback. 

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