The key to buying your first home is preparation (Picture: Getty Images/Westend61)
Buying a first home can be terrifying. You have to find it, finance it, pray the deal doesn’t fall through, then stay on top of your mortgage and other bills.
A recent survey by money.co.uk found the biggest concern for first-time buyers is negative equity, voiced by nearly a third, while 26% were most worried about saving a deposit, and more than one in five feared being unable to afford their mortgage long term.
Some feared the Covid-19 house price spike, while another prime worry was what happens when couples split up after buying together.
Good preparation is key to making home buying and ownership as stress-free as possible, so here’s how to conquer your fears.
Avoid negative equity
No one wants a home that’s worth less than they paid for it, but if you’re happy with the home you’ve bought and can afford your mortgage, it’s best to sit tight and ride out temporary price wobbles.
(Picture: Getty Images/Cultura RF)
‘Negative equity is only an issue when you come to remortgage or sell, so the longer you can stay in your property, the better,’ explains London estate agent Jeremy Leaf, a former residential chairman of the Royal Institution of Chartered Surveyors.
‘Even if prices dip in the short term, they tend to rise over time. First-time buyers should negotiate as hard as they can on the price to ensure they don’t pay over the odds.’
Keep your mortgage affordable
Long-term affordability is taken into account when assessing mortgage applications, but if your income drops due to redundancy, illness or furlough, your lender is likely to be understanding.
‘If you are worried about affording your mortgage, there are ways to get support,’ says Nisha Vaidya, mortgage editor at money.co.uk.
‘This can include a payment deferral, an extension to your mortgage term and a change to your mortgage type.’
It’s worth looking into income protection insurance, which typically pays 50-70% of earnings when you can’t work due to sickness or injury – though premiums can be high and redundancy cover is hard to find.
Keep your cool about price rises
Future house prices are impossible to predict but it’s widely agreed that the rapid rises over the past year are due to a combination of pent-up demand and the stamp duty holiday.
Now that stamp duty savings are being phased out, the market has started to cool down, and Halifax reports a 0.5% drop in the average house price in June.
With mortgage rates still very low, now is as good a time as any to think seriously about buying.
Do your research (Picture: Getty Images)Minimise effects of a breakup
When buying a home with a partner, friends or family, get a co-ownership agreement drawn up by a solicitor.
This includes provisions such as the proportion of the property each person owns and responsibility for paying the mortgage, maintenance and repairs.
It also deals with what will happen to …read more
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