Planning For Buying a House From Childhood
Said to me, how did you do it? How do you get on the property market so young? It's so hard, and this was only what five-six years ago it would be six years ago.
The year, so it wasn't very long ago, so many you guys have said like how did you do it and the property market back then was still as uncertain and so high, and things like that as it is now house prices are just utterly ridiculous, and there were quite a few of different things that we did there were many things that we've I learned along the way. We've rented, we've bought we've gone back into rented we've repurchased, so we've got much experience of the market when it's right to do that.
Certain things have to save and stuff like that, so if you want some tips on how you can get onto the property market at a young age, keep reading, okay.
So the first thing I want to speak to you guys about is renting. Now renting for me is very two-sided. I said when we first rented our first property, we went to a two-bedroom flat, and Adam and I were just desperate to get out of our house and kind of life with each other we'd been living with his parents for six or seven months together I think and we just really wanted our own space, and we were so desperate, and I wanted our own space and to make a home together and things like that so it was a month after I turned 18 we moved into our first lot together, and we started renting now for me. I love the flat, however.
I would advise if you can to avoid renting now there are pros and cons the reason why I'm saying that is because what we've realized in those short ten months for renting was the fact that when we were paying almost double what we could pan on a mortgage for the same price now the reason this is that basically when you rent a property, landlords generally your advice if you are on a buy to let mortgage, which the landlord would have to be on for you to rent the property then they usually have to have the mortgage value or the rental amount 125% so let's say for instance that they pay a thousand pounds to their mortgage lender each month they should be giving us the property for 1250 that's the way that it works and the principle that kind of lives behind it, however, you can already see that they're making a 250-pound extra margin there and that's their income, which is why fight elect is so profitable; however, generally, people can get away with doing a lot more.
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So where we went in was on the London bulges we were southeast the London swells we were southeast London when the borders of Kennin London and the reason why they can get away with it it's because it's so oversaturated there the market is that higher property rental properties go if they're right in second, but they'll be up to date, and then they'll be gone, so renting can be very expensive.
However, the flipside to renting is that you do get to see how to manage bills, and if you've never done that before, it's a perfect base. It prepares you to see you are ready to buy your own home. Are you prepared for the commitment? There are so many bills that we never even thought up from like counter-attacks and contents insurance and water and all these different things TV licenses and stuff like that there is so much that goes into renting a property and so it kind of gives you an idea of the expenditure that will be going out - the higher rental values and things like that now another good thing for renting is the fact that if you are looking to purchase a property, you are in the right place as a first-time buyer or any buyer if you are renting now we realize this when we felt our first property because we wanted to buy another property and we wanted to buy another new-build and for example, the 28-day exchange period that new builds allow wasn't enough time for us to get our house sold then we would be homeless, so we went back into renting in between and then amendment when we found a property that we liked we could just go we were ready to get the ball rolling.
Now deposits are so hard to save; however, there are lots of different ways around
it in other things that you can do so the first thing that I would suggest is if you can stay at home with parents and you avoided all of those rental costs are going to add, and they're going to take out a massive chunk of your money each month, and it's incredible how much you can save living at
home so we rented for ten months then went back to living with Adams parents and saved and saved and saved, and I think we'd bought our home within like a year or two after that I think it was about a year or so after we put down the deposit, and then we had to wait. I think it was around five or six months for our property to built, but we managed to save so much in that time
the reason why it is so important to keep is that not only do you have to look at saving even for a deposit but
There are also so many other things that come into it, so you have to think about your solicitor fees when you move you also have to think about actually keeping up your property with sofas and beds, and fridge freezers and washing machines do all things like that if you move into a new bill generally, there are extras you've got to pay for and flooring, and there are so many things you need to consider now I would not only massively consider living with parents but go through and make a budget and look at that budget look where you can cut out costs so, for example, I used to work in London, and I used to spend a fortune a day on breakfast and lunch I was going I would probably say I'm 15 20 pounds a day on lunch and breakfast and coffees and things like that which is just ridiculous when you cast over a week is 100 pound a week 400 pounds a month just gone on food and drink, and that's not even including dinners and going out with like Adam and things like that so really look at maybe.
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Bring it in your lunches and stuff like that. I would also consider cutting things like sky out Netflix. Whatever it may be really limiting down and this sounds stupid, but obviously, these are all going to affect how much money is coming in while you're trying to save, and my last point on this would so also have a look at what you've got going out credit-wise now to buy property you need to have a good credit score no ones going to lend to you if your credit is terrible so first point going back to the deposits in the saving is making sure you don't take out any new credit before moving in this affects the affordability and the number of mortgage lenders but borrow - you say you want a new car see if you can hold off of that new car until after you've done your mortgage and you've got on your house and you've moved in then try and look at doing it it will affect how much you can borrow now saying that that doesn't be sentence a report with your money at the same time.
I know I'm saying hold off because mortgage lenders look at what you can borrow they see how much is and they think can you do it within your means and things like that sometimes you may have well more than you need to keep it within your needs and the amount thing what Bo you might be loads more than what you want or need I'm just saying be careful with it it doesn't mean after you've moved in go out and buy that new car and then obviously make sure it's within your budget, but it will affect your affordability now like I said I just touched on it but you also want to make sure that you do have good credit.
I would recommend signing up to something like credit expert or experience or something like that I think they're like 15 pounds a month when you sign up I's different doing these I would say at least six months in advance of you looking to buy a property and when you're getting the ball rolling on this you want to make sure things like you're on the electoral roll where you live, and you want to make sure there's no missed payment and if there are, and you disagree with them then you need to fight against them likewise things like missed payments default C C J's anything like that will go against you, and I think so many young people now think oh it doesn't matter if I don't pay this back if I miss the payment, but it can affect you in the future so if you are young and you want to buy a property make sure you're keeping on top of the credit that you've got even if it's just meeting the minimum payment prioritize That over drinks at the weekends with your friends otherwise,
I don't know that doesn't get anywhere, I would also make sure things like all of your credit lenders if you have a couple of credit cards make sure they will register to your current address you need to be trackable and findable for mortgage companies to be able to find you quickly and know that you are whom you say you are and everything matches up. Likewise, you're going to want to make sure you have got the credit, and all of these points help enhance your credit and get you to the top. I think me and Adam had like nine nine eight credits go off such a long time and every time, for example.
You do a credit check and things like that. It knocks your credit score, so really look in, folks. I think anything more than three credit checks in three months need as bad and can affect your credit score quite a bit, so looks into that and also likewise don't go and do loads of different things on your
credit because it can affect you, so the next point that I want to make is if you are young or you're old if you're a first-time buyer or not even a first-time buyer, so you're buying your second or third property and it's your only property you're going to own really consider and look at the schemes that new-build offer now the reason why I say this is because when I and Adam purchase our first property our local council actually had an offer that they used with the development and basically meant that we've got 25% of a loan as a search against our houses that council-owned and so we owned all the property was a bit weird and it's very much like the help device we own to the full property they loaned just 25% of the value and it's interest-free for 25years now that was an absolutely amazing scheme and it was out before the help to buy scheme actually existed but now help to buy it is very similar whereby they do 20% but it's for five years and then it's interests free and you can choose the staircase yet pay it back and things like that
.
I would recommend that anyone do that because ultimately for that five year period you are saving interest on 20% of your mortgage when you put that into a mortgage payment if you were to get the mortgage amount for the full amount even if you can't afford it you're still going to be paying interest on that 20% that you just don't need to pay then what you can look at doing is after the five years you can look at them by in the council owl or help to buy which is the government you can look at buying them out and just getting a mortgage for the larger amount and then all you've done is you've saved yourself that 5% interest for all of that time it's a cost-effective way to do things. I would also consider if you're a first-time buyer to look at the ill dooms account.
I think it is like building societies and thanks and things like that. Many of them offer you to put funds in and save if you're saving alongside. I think not let's do it then they offer you kind of excellent early low rates as well for getting out your mortgage so as long as you've been saving it on side them, they have special offers for either first-time buyers or people that are saving with them so again that is another option that I'd consider live to do that and save with a bank and things like that so I know I briefly touched on budgeting.
But another aspect of this is salient and making money so the first thing that I'm going out with regards to saving money is you I'm not going to be able to save money unless you've done a budget so I primarily do that budget see what you've got left at the mums at the end of the month and then what I would recommend is that you put that money aside straight away take that money and have a standing order coming out of your account on a page each month whether it's hundred pounds two hundred thousand pounds whatever you can afford to take out the maximum money and have it going into a savings account that way that money is no longer in your bank account and you can really assess what's left and use it and then you work towards and use the money that's in your bank account if you have an extra thousand pounds or an extra five hundred pounds in your bank account during the month you will dip into that there is no other way about it you will use it it is just part of the parcel of life if we've got it we just seem to think it's there and it's really hard to not touch it.
So I would really recommend moving it out of your account and doing that likewise the next bite is made extra money so for us, it was about making as much money as possible in our house as we could so we did things like no spins where we weren't like a whole month and we didn't spend any extras I'm actually in the process of doing a no spend on you at the moment which means any unnecessary purchases.
I'm not making so no new clothes no new home items no no I don't know whatever it is I'm not buying it because my bank balance really means this help and recovery period since the Christmas period so what I would recommend is you really kind of avoid spending not only that I would look at making extra income wherever you can it so work extra hours at work if possible take on overtime if possible and something that Adam and I did loads during this period as we did like fake white dinners, so we made like a slimming world faith way dinner, so maybe we made like a Chinese or an Indian and instead of having a Safeway we did that that saves you so much money if you spend 20 or 30 pounds on a takeaway even if you had a pizza.
For example, and you went to I don't know Domino listen you get a pizza for 20 pounds you can go and buy the equivalent for like 5 pounds, so you're saving yourself 15 pounds just there and then look at what you were going to spend - so you did one of Domino's put that 15 pounds into your savings account the last thing that we did loads of was selling old stuff that we didn't need now this not only hope to us in the move process because it remembers that we weren't moving clutter from one house to
the next but my declutter meant that our living space is and we made extra money, and there was so much money we made I mean we made about a thousand pounds I'd say from selling old things they were like handbags I had, but I know I want it we made so many boot sales so we did so many I've never made a boot sale before doing a boot sale myself when we moved before we bought our first house and I've never done it before I know I was that person standing there with all this stuff that still had loads the tanks on and people wanted to offer me two pounds right, and I was like no that's 20 pounds please love and yeah I quickly realized, but I wasn't getting that amount of money but I don't need you anymore it was only going to go to the tip or something like that, in the end, I think a lot of it we end up getting and bringing it to charity shops anything that we didn't want and then backing it up in those you know those bags that you get and that the dumper trucks made weight your clothes can give you money.
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I think we got a free pound for it, which is pointless. A private community or charity shop, however, by making boot sales and selling online at Facebook it's so easy to sell on you've got deeper you've got Spock there are so many different places that you can go onto and have a look at these are good ways no acquires to save a bit money when you aren't buying things I would highly recommend quid coat I have used it for years now I will leave the link below if you want to sign up because I believe that if you sign up using the link below, you get five pounds after you've made your first purchase or got your first cashback or something like that. Still, I label the information below for you.
But I love the quid coat. I use it on everything that I buy. You pop onto their website, typing the name of the retailer you're
buying from, seeing if there's an offer on to get interested back. When you get a percentage back, click through on the link, and there you go. You've got it you can shop on there, and you're done, and it pulls for all your things that are in your basket as well, so it's straightforward to use and a way to what makes money, and I think selling what you don't need is excellent. I also wanted to mention that Adam and I did any loose change that we had put into like a park savings pot. It was kind of anytime we broke into any money. I'm a big fan of not having coins in my purse, so if I've got them, I generally Chapmans let the self check out and
Things like that, but what we even saw - doing what instead of doing that we made a savings part and the amount of money that you can save just by checking in like the odd pound coin you got twenty and fifty Peas just emptying up your purse or wallet your pocket whatever it is you save so much money so I would also highly recommend any loose change popping it away don't lose it don't risk it going walkabout some falling out your pocket, don't use it.
You can make a lot of money by doing that. Again it's money that you don't know go in that you can say from, so I keep it in line with up the whole money-making thing. I would also highly recommend you set savings goals. By doing this, you can really kind of focus on how much you want to save by when I would maybe write down a list of things you're going to need so, for example, you deposit the first thing you name safe by if you know you want to move you've got three months to make that money you know how much you want to make, and you know how much you've got put weight each month if you're then got excess money and you can.
then put that into another savings pot to say I don't know your solicitor fees and things like that really make a look at making goals because they really help you to kind of really see where your money needs to be going each month off the back of that I would also recommend that you get an independent financial advisor to help you now both times that me and Adam of purchase properties we've used independent financial advisors, and they are the best type of people to go to, so they work independently, which generally means they get to scan the whole of the market don't have any kind of relationship with anyone particular bank or Building Society or lender as such and they can really assess your needs and you as an individual and see what will work better for you and lend quite highly when it comes to people that have bonuses and things like that and harass.
Adam always made a consistent bonus and he contributed quite highly to his salary so even though his salary was a little bit lower his bonuses were really high and one of the jobs that he had in the past so for us, we needed a lender that was going to take into account the majority of his bonus there are a lot of lenders that either doesn't take them into account, but they take a tiny proportion, and it's got to be guaranteed and listen on the other so a financial adviser can really scatter the market look at the best rate look at your situation look at some banks work the amount you've got to put down into a posit I'm really scan everything likewise you generally don't have to item for their services they get paid by the lender they use s you're then not forking out for that either generally if you find if you go to a bank they normally actually charge you so go into a bank directly isn't a a good thing to do, and if you go to a bank directly, they will run something I think it's called it's not an API is it isn't called up a mortgage and printer boy it's like an affordability check, and you definitely want to have one of those before you start looking at what house you want to purchase or flat or whatever it may be runs because you need to know how much you can borrow there's no point in you looking at a house that's 300 grand if you can only lend 150 grand so a financial independent adviser will be able to scan the whole market look at the best lenders and then run that check on you so when you go to look you know you've got the best advice the best rate and the amount that you can actually borrow. if you go to one bank again every lender two criteria it's different they might not be able to lend you as much as another bank and you might be shortchanging yourself on the property that you can get or things like that and likewise once they've run that check on you that is one credit track against your credit score so if you go to an independent they can obviously scan everything you don't really know from one point to another to another so I'd really look at getting a really decent financial adviser okay so the last point that I want to make are when you are looking for a property look at the area and assess it if you are going to buy in central London, for example, the prices are already extortionate there is really not much much money as he made in a lot of the areas in London as it speaks, however, there are still up-and-coming areas and this is where I and Adam have been quite lucky when we've bought we've always assessed the areas that we're buying in so our first property was just outside of London like.
I said it was on the CEM borders and it was a nubile development now you normally find with new bills that the properties they first looked at the very beginning are the properties that are gonna make the most money because they start off a lot lower in price also whilst the development is selling houses your property might not make too much money but generally by the time they finished building your property we'll have roads in value as well because you're not competing with the properties that are currently on there it's also a really good time to sell because generally, your house will be less than that the last stages of the properties as well-meaning you can sell your house for
more with more in it, and generally, it kind of makes your house a lot more appealing.
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However, Adam and I were fortunate that when we bought our house, it was an. Up-and-coming area. They then decided they wanted to put in other things around the room. It's basically made the area where we've got our first house boom. We made a lot of money on the first property. We were fortunate that we already know we've made money we bought off we only saw as a show home in a different area we're used to that. However, we know we've made money here we've put in some charming finishes and things like that, and ultimately if you're buying at the right time in the right place, you can make a lot of money and the last thing I guess I want to say is that your first home probably won't be your dream home you aren't probably not going to get everything that you want in a dream home and even now in the house I live in there are so many things that I can criticize about this house and I love this half the pieces it is lovely however for example for me our drives a little bit too small and I hate the fact that we don't have a sink that overlooks a window and things like that and you only learn that by buying into each house and notice in the problems like I've always had a sink that I overlooked a window and when I was listening with hands it didn't even think anything about it it's something that's a massive bugbear of mine and I hate not having a really lovely high up windowsill because the one that I've got in my current property obviously the kids can get to there are little things like that that you learn along the way but just remember it won't be your dream home highly rightfully it won't be ah we have a little bit of time a little bit of patience you can make money in at home if you're following all of these right things to do you will buy your house at the best price you'll be able to save make money and then move on and eventually you will buy your dream home.
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