The idea of kicking the landlord to the curb and setting up your own home however you like is a truly thrilling prospect. Most people who want to own their own home start looking at properties with a wish list of wants, that eventually gets whittled down to basic requirements. You might start dreaming of ways you can renovate to create the home you want, to build an office, create space for a nursery, plant a herb garden.
Of course, in all the excitement and planning, many people forget that they are about to take on the biggest amount of debt that they have ever had in their life. Although it may be a pretty normal part of life for most people in Northern Ireland, and indeed throughout much of the world – few people can afford to buy a house without some form of mortgage, it is still not something to be taken lightly.
Before you even start looking at houses you should contact a broker to get solid mortgage and financial advice. A mortgage broker or financial advisor will obviously be able to help you work out how to apply for a home-loan, but they are able to offer much more than this.
What interest rate should you be paying, should you have a fixed or floating rate, should you split the mortgage so that you have different terms, can pay off part of the loan faster. What about interest only mortgages, are they something that you should consider or run a mile from? Where should you go to get the best rate and the best deal? This is the type of advice you can get from an advisor. They are not tied directly to any one bank, so are able to work in your best interests to get you the very best deal.
If you have a lower income, a lesser deposit or poor credit rating, then an advisor will be able to work with you to find solutions that will allow you to get into your first home.
It is an unfortunate fact of life that our dream mansion is probably not going to be feasible to purchase as our first home, however that doesn’t mean you should give up on your dream, although you may need to change your dream slightly. https://www.afr.com/business/banking-and-finance/home-loans-delayed-denied-and-dearer-post-hayne-20190422-p51g5h Once you have spoken to a broker or financial advisor, they will be able to give you an indication on how much you will be able to borrow for a home loan.
If this amount is not quite enough for what you were wanting, then you can revaluate your options. This may mean trying to find a cheaper home, finding a way to increase your income (or reduce your debt), or looking at waiting while you save a little more as the deposit.
If you decide to look at a cheaper home, go back and talk to your broker, as what they may be get sorted for you is an amount to borrow as part of the mortgage that can be used for renovations. In organising your debt this way, you can buy a cheaper house that needs a little work to bring it up to the standard you are after, which will also increase the value of the house. The bank may accept the anticipated increase in value as enough to allow you to borrow the renovation money. However, be aware that you are taking a gamble that the house will increase in value once you have renovated, and if in the process of renovation you uncover deeper problems with the house, you may find yourself with a partially destroyed house that you can’t do much with – and you still have to pay the loan each month.
Valuations (see here), registration, insurances, auctions, it can all be pretty daunting for a first-time buyer. One of the ways that a mortgage broker can make your life a little bit easier is to get you a pre-approved mortgage, which means that you know exactly how much money you have to play with. You should still purchase the house subject to financial approval, as in some instances although a bank may have approved you to borrow the amount you need, they may not loan on a particular property for a variety of reasons. Again, this is something that if it does occur your broker can help you with.
You can do all of this on your own, but you will often find that in a few years you will discover how much you could have saved if you had done things slightly differently, so talking to a broker at the very start can be a great advantage.