4 things to plan and organize when buying your first home
Taking your first steps onto the property ladder can be an exciting yet daunting experience. If you are used to renting, then it will feel very different for many reasons but, although it might take a little getting used to, most of the differences are positive. Granted you will no longer be able to ring your landlord if your boiler breaks down or a tap starts leaking, but on the flip side, the home you will be paying for is yours.
You can decorate to your own tastes, buy the furniture you want and, within reason, do what you like. Gone are the days of wondering if your rent will increase or if you will be given notice to vacate. You are buying a home that is yours, and that is very exciting.
There are lots of things to consider and arrange, so to help get you started, we have put together a list of 4 things to plan and organize when buying your first home.
What is your borrowing power?
If you aren’t lucky enough to be making a cash purchase, then you will need a mortgage to fund it. If you haven’t already done so, speak to a mortgage broker. They will take some details and give you a rough idea of how much you can borrow as well as providing details of the mortgage products currently available. Rates will vary depending on your deposit as well as various other things, such as the product term, arrangement fees, and such like.
Once you have decided which mortgage suits you best, a full mortgage application can be processed and you will be advised in due course whether or not you have been successful. Once the mortgage is approved, your property search can commence.
Make sure you have adequate insurance
You must have appropriate and adequate insurance in place to cover any damage or destruction to your property. Your lender will usually insist on seeing a building’s insurance policy before releasing funds so they know that the loan is protected. It is also wise to take out contents insurance to cover your belongings, so it’s worth sorting it out before your purchase goes through.
If you are buying a leasehold property then buildings insurance is typically the responsibility of the freeholder, although your solicitor and lender should check to see that the freeholder building insurance is adequate.
Combined buildings and contents cover will usually be cheaper than taking individual policies, and premiums can substantially vary, so it’s worth shopping around for the best deal. If you want to save a bit of time, using a comparison site is a great way to quickly compare premiums and policy benefits.
Think carefully when choosing furniture
If it’s a starter home or apartment you are buying, then you may be limited on space and storage. If this is the case, then, when purchasing furniture, try and be very methodical and clever about what you buy. If, for example, you are limited to one bedroom but fully intend to have friends and family to stay from time to time, sleeper sofa beds are a fabulous choice. They are comfortable and very easy to convert into a bed but look just like a normal sofa.
When buying other furniture such as coffee tables, beds, or TV units, try to find pieces that have storage built-in. The more space you have for your belongings, the less cluttered your home will feel, and the more homely it will be.
Budget carefully
You may be able to afford the mortgage on a property but have you considered the other costs associated with being a homeowner? Budgeting is one of the most important things you can do, so take some time to make sure that you have accounted for everything and that your outgoings don’t exceed your income.
As well as your mortgage, you need to account for insurance, power bills, and any local property taxes that may be payable. It’s also worth putting aside a contingency fund for any maintenance issues or one-off payments that you may encounter in the future.
Let everyone know your new address
As well as letting family and friends know your new address, it’s wise to set up a mail redirection with your local postal service so that you don’t miss any important correspondence. Let your employers, bank, doctor, dentist, and credit card companies know your new address too.
If you are at all unsure who you should tell, there are lists online that can help make the process easier for you. The more people you alert before you move, the less hassle it will be afterward.