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Financial Advice Ahead Of First Home Purchase

Posted 18 February 2022 by Keith Osborne

Some steps to follow that can help you get your finances in order so you can secure your dream property in 2022...

There is no denying that buying a home is one of the most significant investments you will make throughout your lifetime. It certainly requires a lot of upfront costs, and for some people, this can be quite difficult.

Luckily, there are some steps that you can follow to help you get your finances in order so you can secure your dream property in 2022. Take a look at the six top tips below.

Research the cost of homes in your area

So, you are looking to get your finances in order to help you afford your dream home. To begin, you firstly need to understand how much money is required. Research the cost of homes in your chosen area, and this will give you a clearer idea of how much money you need to save in the form of a deposit. It also helps you feel more prepared when going into your house search. You know what you can afford rather than feeling disappointed further down the line. This should always be your starting point when you are getting your finances in order, as it helps you set a goal from the get-go.

Doing this also prepares you for compromise. Maybe you dreamed of buying a home with a large garden or a garage area? Upon researching, you may find that these features do not fit into your budget and therefore, you may need to compromise on some things. Take a look at some common compromises online to help you. It helps to prioritise the things that are most important to you. Remember, this will differ from person to person, so you should avoid listening to too many opinions and do what is right for you. You don't want to have any regrets.

Create a monthly budget

Budgeting needs to become your new best friend. If you are not in the habit of tracking your spending and sticking to a monthly budget, now is the time to change that. Taking time to sit down and look at your income versus your outgoings will give you a clear idea of how much money you can save each month. Use a budget planner to help you; these can easily be found through a quick online search. Creating a budget will help you prioritise your money. You may realise that you no longer need your membership to four different subscription services or that takeaway breakfast sandwich each morning.

Budgeting is crucial in helping you get your finances in check. Another helpful tip can be to use cash instead of a card. Contactless cards have made it easier for us to use our cards for minor purchases. However, the odd pound or two can certainly start to add up. Instead, withdraw the amount of money that you can afford to spend each week. This will prevent you from overspending, and you can work towards saving for your dream home.

Hire a mortgage broker

If you are preparing to buy your dream home, you will likely need to apply for a mortgage. It is crucial that you provide the correct financial information in your application. Failure to do so will affect the progress of your application, and you may struggle to get it approved. Applications can be difficult to follow, and the financial information you need to provide may not be clear. Luckily, you don’t have to tackle this on your own. A mortgage broker can help you through each step of the way. Their job is to guide you through the application process.

Mortgage brokers can give you financial advice and negotiate the best mortgage rates for you. So, you can find a mortgage that fits nicely within your budget. You can now find a mortgage broker at the click of a button. Companies like Money Nest allow you to gain expert mortgage advice in a matter of minutes. Simply fill out a quick form, and you can speak to a dedicated expert who will help you find great deals on mortgages. Often, it can help to have an expert on side as they can find you better mortgage deals rather than tackling it on your own.

MoneyPay off existing debts

Debt can be a challenge to resolve. The important thing to remember is you are not alone. Statistics show that the average total debt per adult is £32,052 in the UK alone. Juggling a long list of debts is not ideal if you are preparing to buy a home. It is advised that you pay off any outstanding debts you have before going through the house buying process. Doing this will put less financial strain on you in the long run. However, it is a lot easier said than done.

Your list of debt can be easy to ignore. However, skipping payments is not going to make them go away. In fact, it will make it a lot worse. It’s time to stop ignoring your debt and face it head-on. Start by listing your debts in order of priority. Ideally, you want to pay off the debts with the highest interest rates first as they will start to increase in value more rapidly than others. Seek support online from money advice forums to help you.

Open a savings account

If you want to start putting money aside to save for your home, you need to open a savings account. An account like this is essential when it comes to purchasing a property. It allows you to put money aside, so you are not tempted to spend it on unnecessary items. A savings account can also act as a safety blanket. Sometimes, there may be some shock expenses when buying a home. You may need to pay for some maintenance issues that occur. Having a savings account can act as an emergency fund. You can take money from it, putting less financial strain on you.

When it comes to choosing your savings accounts, you want to choose one that has a high-interest rate. High-interest accounts are beneficial as you get a more significant return on investment. Start researching some of the best saving accounts currently available. There are plenty for you to choose from. Contact an employee down at your local bank who also may be able to help you.

Look into ways to increase your income

Sometimes our monthly paycheques just don’t cut it. After paying your monthly bills, you can often feel like you have no money left over to put into your savings. This certainly makes it difficult for you to buy a property. During times like these, it can help to look at ways of increasing your income. This doesn’t necessarily mean you have to take on a new job. In fact, there are plenty of money-making techniques that you can try to help you boost your savings.

Selling sites have grown in popularity over the years. Now, you can turn your old clutter into cash all from your mobile phone. Sites like eBay, Vinted and Depop are some great examples. Signing up to them is free, and all you have to do is snap a pic of the item you wish to sell and post it online. It really is that easy. It is recommended that you look at some money-making techniques online, as some may surprise you. The money you make can then go into your savings pot. It’s a win-win.

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