For many young people, it is the ultimate rite of passage: getting your own place. The chances are slim that you will be able to buy it straight away but in due time purchasing could become a considerable possibility. Buying a house will be one of the biggest financial decisions of your life but it will be worth all the effort.
Getting your affairs in order to buy a house entails a lot of admin and research. But remember to be patient and follow these steps to get the process going:
Work on your credit score
You are never too young to start working on a good credit score – this is very important, even if you start small. Start by applying for something minor but practical, like a dishwasher or a clothing account. This will reflect on your credit record and it will show your future loan provider that you can pay your debt responsibly.
Decide what you can afford
When you realise you aren’t earning the peanuts you used to earn as a fresh-faced graduate, calculate whether you can afford to spend a certain amount on debt each month. Look for property in your price range as it is important not to take on crippling monthly payments. Buying a house is a big step and if you get a loan that is too big you will fall behind on payments and that will end in catastrophe.
Start saving for your deposit
You will need to put down a lump sum as a down payment to secure your home if you do not get a 100 per cent loan. You will be required to pay a minimum of 10 per cent of the total cost but you can opt to pay more. The more you pay, the less you are required to pay back in debt.
Apply for your loan
This is probably the most nerve-wracking part of the process but if you are within your budget and you have taken care to build a good credit score, the application process should go smoothly. Approach various loan providers and compare deals before you apply for and accept a loan. Be patient – it will be approved when the time is right.