Wednesday, March 22

How to be in a Stronger Financial Position when Buying a House

With the current freeze on stamp duty, it seems like the nation’s in the grip of a house-buying frenzy. In fact, a recent survey found that 12% of homeowners have put their property on the market in the past four months. Despite the stamp duty break, moving house is still a massive financial commitment, so it’s essential that you make sure you’re in as strong a position as possible to do it.

Whether you’re upsizing or taking on a renovation project, whatever you can do to strengthen your finances will make the whole process a lot less stressful. Plus, it will increase your house-buying potential!

Here we look at ways to do it.

Use a mortgage broker

With so many different deals and types of mortgages out there, it can be difficult to know which one is the right option for you. And more importantly, which option will save you the most money. 

A mortgage broker will quickly navigate the different fees that lenders add on, and work out which will be cheapest for you. They’ll also save you time by taking your personal situation into consideration and only suggesting mortgages that you have a good chance of being approved for.

Not only that, but they can chase things along for you and take care of the paperwork, leaving you to focus on other aspects of your house move.

Use a loan to get your house ready for sale

While you wouldn’t take out a regular loan to buy a house, you could use it to increase your home’s value. Spending a small amount on improvements such as new bathroom features, kitchen counters or a new paint job can increase your home’s value by as much as £7,000, leaving you with more money to put towards a deposit for a new house. Just make sure you have done your sums beforehand and researched how much of a return you will get on your improvements.

Make the most of government help

Lifetime ISAs (also known as LISAs) were launched in 2017 to enable people to save for their first home or retirement. Essentially, the government will give you a 25% bonus of whatever you put into it every tax year, up to a maximum of £1,000. You can then withdraw this, penalty-free, to buy your first property.

Likewise, the government’s Help to Buy scheme allows you to buy a home with as little as a 5% deposit, or buy 25% of your home and pay rent on the rest.

Do your market research

Before you buy a house, you need to be sure that the property you’re interested in is a good investment. Is the asking price in line with the area’s average, for example? And is the area you’re looking at likely to hold its value? 

Armed with these tactics, you should be in a much stronger financial position and more likely to be able to afford the property of your dreams.

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