Past Mistakes With Money Needn’t End Your Homeowner Dream

Last Updated on August 21, 2023 by SampleBoard

If you dream of becoming a homeowner but worry about the financial elements, you are far from alone. Thousands of prospective first-time buyers are in a similar position. And while past financial problems may put some additional obstacles in your way, it is possible to turn your dream into a reality. 

However, you will only make this happen if you take responsibility and analyze your options. Here are some of the key steps that may allow you to step onto the ladder.

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Get A Mortgage Offer

Unless you win the lottery, a mortgage will be needed to make your homeowner dreams come true. Less options may be available due to DMPs and low credit scores but that doesn’t exclude you from receiving an offer. Working with the right mortgage lender and gaining an offer in principle will allow you to start looking at properties. Another option is to ask your parents to be guarantors on your mortgage.

In the meantime, saving a large deposit will be very useful. As well as strengthening your overall buying position, it brings your loan-to-value ratio down. This will give you a far better chance of being accepted. 

Look At Cheaper Locations

If you want to find affordable housing, careful considerations should be made about the location. Generally speaking, the north is cheaper than the south. So, if you’re flexible on where you can live, relocating could be the best way to start a new chapter in style. Even if you wish to stay local, most towns and cities have cheaper areas. In many cases, moving away from the CBD will reduce your costs. But not always.

Conducting your research into different locations will allow you to find one that balances costs with life quality. It will provide a valuable step on the path to making your homeowner dreams a reality.

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Consider A Fixer-Upper 

Another way to find an affordable property is to target homes that need work. The truth is that you will be looking to stamp your authority on the new home anyway. The money saved on getting a cheaper place can be used to decorate it. This is a great chance to unleash the latest bathroom trends or adjust the property to suit your needs. You should find that the value of the home quickly improves too.

Fixer-uppers are readily available through auctions as well as traditional listings. Meanwhile, owners of inherited properties, for example, may be willing to drop the price further. So, you can get more for your money. 

Research Shared Ownership

Even if you are accepted for a mortgage, it doesn’t necessarily mean you can afford your dream home. When buying the full property is outside of your capabilities, it may be worth looking at shared ownership. This means that you will buy a percentage of the property while renting the rest. It can be a good way to get onto the ladder when traditional methods aren’t available or when you need a bigger property than you can afford.

You will lose some money from rental payments. However, your monthly outgoings are reduced. This is because the rental agreement has a lower interest rate than virtually all mortgages.