Is it time to make the leap and move from renting to buying a place of your own? Congratulations!
s1homes not only has the best properties for you to choose from, but we’re also here to help you every step of the way.
The basics
In many ways, buying and renting are very similar: you pay a monthly sum to enjoy your living space and you’re responsible for the bills linked to the property.
The big difference is that, although you have the freedom of moving on more quickly, when renting all of your cash goes to the landlord.
When you buy, some of your money goes to a lender to pay the mortgage interest but, with the right market conditions, most of it should act as an investment, building up the equity in your home.
Getting started
No doubt you’re wondering when you should hand in your notice? Well, this will very much depend on your relationship with your landlord. The best will be willing to work with you and be flexible in the notice period to work around your purchase negotiations.
Usually, however, giving notice must be carried out exactly as stated in your lease agreement.
Rule number one: never rush into anything. Buying is a big investment and often the sale process can take longer than you might think. In a rare but worst case scenario, buyers can find themselves looking for emergency accommodation after giving notice before the deal is done on their new home.
This is why your solicitor or conveyancer will normally advise you to wait until everything is signed, sealed and delivered – even if this means factoring into your savings the potential cost of temporarily doubling up on rent and mortgage.
Let’s talk deposit
Your rental agreement will probably have stipulated one to three month’s rent as a deposit. Alas, buying your own place requires a much larger sum: at least 5% of the purchase price and usually more. This means some serious savings.
Thankfully, for first time buyers there are schemes to help you out. You can find out more about them here (https://www.s1homes.com/blog/help-to-buy-why-this-isnt-the-end/).
The small print
When making your move, it’s not only the cost of your dream property you need to consider. Think fees: legal fees, valuation fees, mortgage lender fees . . .
Remember, too, your rental property may need minor maintenance or deep cleaning and this will come out of your rental deposit before it’s returned.
Of course, none of these should be seen as obstacles to ownership. With a little forward planning and some detailed budgeting, they simply become part of your ‘big investment’ for now and the future.
Speak to an expert
When switching from renting to owning it pays to speak to an expert. An independent financial adviser or mortgage broker will help you work out what size of deposit you need to save for, how much you can borrow and which is the right type of mortgage for you.
An estate agent, meanwhile, will use their knowledge and experience to help you navigate your way through many choices, including the type of property and the best location.
Now why not get ready for your first move by exploring the countless possibilities for owning your new place on s1homes?