This is a collaborative post.
When you want to buy a property, it’s likely the first thing you’ll think of is getting a mortgage. This is a great start, and it’s going to help you in most cases. However, once you have spoken to your mortgage broker and determined precisely what it is you need to take the next step on your journey to becoming a property owner (or owning more property if you already have a house – perhaps you are looking to become a landlord, for example), you’ll need to take that next step; and several steps after that.
Buying a property is not a simple process, but it is a worthwhile one, and it pays to understand all the different ways to do it. Read on to find out more, and you might just find an option that you hadn’t thought about before, but that will enable you to buy the property of your dreams.
The more you can put down as a deposit or down payment for your new property, the smaller your mortgage will be. It might even be possible, with a big enough initial payment, to reduce the term of the mortgage (usually anywhere between 25 and 35 years), meaning you will pay off the debt much earlier than you might have thought you could, leaving you with an asset you own entirely. Plus, the smaller your mortgage, the smaller the monthly payments.
It may sound hard to save up for the deposit on a property. It’s undoubtedly where many first time buyers have trouble – even though they can afford the mortgage itself, it’s this first payment that is hard to save up for – but if you can live very simply between now and the time you want to buy a property, it can be done.
Take a look at all your outgoings and work out which ones you can dispose of entirely and which ones you can cut down considerably. Your food bill might be cut, for example, and your entertainment expenses can be reduced in many cases. Put the money you would have spent on these things into a savings account, and you’ll be on your way to having the deposit you need.
If you already own a property and you want to move to a new one, there are many considerations to think about. The cost is one of them, and if you want to save money on your mortgage, this could be the ideal time to do it.
Assuming you can downsize to a smaller property, you could save a great deal of money. In fact, depending on where you are moving to and how much of a difference there is between your property and the next, you might even find that your mortgage becomes very small indeed.
This idea won’t work for everyone, but it is definitely an idea to think more deeply if it could work for you.
Some properties don’t go up for sale in the usual way through an estate agent. Some are put up for auction. These are often properties that have been repossessed by the mortgage company, or they belonged to someone who passed away and had no family to leave the property to.
Don’t let this put you off; these auction properties can be excellent bargains. As long as you have your mortgage and deposit in place before you start bidding, and as long as you are careful not to overspend, you might be able to come away with an excellent property for a low price.