How To Get Your Foot On The Ladder As A First-Time Buyer

If you’ve got dreams of getting onto the property ladder then you’re not alone. Many people in life want to make a big financial investment such as buying a home. The reason for this might be to start a family, have a place that you can call your own, or have an investment that hopefully further down the line, you’ll be able to benefit from.

 

Getting your foot on the ladder though nowadays is a lot more challenging than it used to be. From rising inflation rates to the cost of everything being more expensive than it ever was before, means that many people will struggle to buy a property in their lifetime.

 

However, if you’ve got the tips and tricks you need to get yourself closer to that first rung of the property ladder, then hopefully you’ll be to one day, afford your own home. With that being said, here are some useful tips to get your foot on the ladder as a first-time buyer.

Start saving now

There’s no better time than the present when it comes to getting yourself started. Saving money is the main crux of getting yourself on the property ladder. It’s something that you’re going to need a substantial amount of, depending on where you choose to live and what type of property you go for.

Depending on where you live, you might find it harder to buy a property in that area due to being a popular location or there being a limited amount of property available for your price point.

When it comes to putting a downpayment onto the property, it’s good to consider what extra funds you’ll need. You’ll need more than just the downpayment. There might be a variety of other fees associated with the property sale, including lawyer fees to process the application. The more you have, the better position you’ll be in.

Start saving now, rather than saying you’ll do it in the next month or so, or even in the new year. By starting today, you’ll be one step closer to buying a property.

Pay off any outstanding debts

It’s important to make sure that you’ve got no negative credit against you when it comes to buying a property for the first time. The reason for this is that having negative credit, it will likely go against your borrowing power.

It’s useful to ensure you’ve paid off any and all outstanding debt to your name and that includes anyone that you might be buying a property with. Both of your debt that has been accrued, will influence the success or failure of your ability to get the loan needed to pay for the property.

If you’re struggling to pay off debts quickly or you have accrued quite a selection of debts, then try consolidating them all into one place. That’s going to make the payments easier to manage and you’re likely to pay them off quicker. When you have multiple debt sources, you could be subjecting yourself to more interest and fees as a result.

Cut out luxuries where you can

Luxuries are something that we all have and that doesn’t mean designer handbags or an expensive gym membership. A luxury is considered anything that isn’t your rent, bills, or the food you’re putting into your belly every day. Of course, the food part is within reason – so consider this your weekly grocery shop.

Anything else is considered a luxury, even the new clothes you’re wanting to buy to update your closet. With that being said, it’s worthwhile cutting out luxuries where you can. The reason for this is that you’ll be able to save a lot more money when your outgoings aren’t so extreme.

Take a good look at what you’re spending on your luxuries and try to cut them down as best as you can. When you’re trying to save for a home, you’re going to need to make sacrifices. Some people have to make more than others in order to reach their financial goals. However, it’s all worth it for the results it provides.

Create a financial goal

A financial goal is something you want to put in place from day one. How much do you need to save in order to make the purchase of a lifetime? Creating a financial goal is going to give you that motivation. That motivation you need to set aside that money each month for your savings.

It’s going to be the thing that guilt trips you into choosing a night in front of the TV instead of spending more money on a night out.

Creating goals in general is a great habit to have when it comes to achieving everything you want in life. Try to create the goal as early on as possible, remembering to factor in your down payment and everything else that will need to be spent on your first home – like furniture for example.

Have a budgeting spreadsheet in place

If you’ve never been a saver, then you’re likely going to find saving for a home, difficult. When you’re not used to setting money aside, chances are, you’re not used to budgeting.

Do you have a budgeting spreadsheet? If you don’t already have one, now is the time to do so. Use Microsoft Excel or Google Sheets to set yourself up with a budget plan so that you know exactly what’s coming in and going out.

You might also want to look online for helpful templates if this is your first time-saving money for a property. If you’re not used to budgeting your money or saving it, then you might not have a clue where to start when it comes to creating a budget spreadsheet, to begin with.

Consider if you’re buying alone or with someone else

Are you going to be buying your property alone or are you looking to buy with someone else? It’s something to consider, especially if you’re buying with someone else. There are some great perks to buying with another person. You’re splitting the cost of everything, which is always helpful.

Whether it’s a partner, family member, or friend, you want to consider carefully if they’re the right person to be financially tied to. Ideally, you want someone who is secure in their job, wants to buy a property for the same reasons as you, and will be able to maintain the payments and outgoings required.

The last thing you want is someone who won’t be able to make the payments and then put you in an unfortunate position where you have to consider selling the property.

Research buying schemes

Make sure to research buying schemes when it comes to buying your first property. The reality of buying a property might not have been something that was possible in reality but recent buying schemes like this $25,000 first-time home buyer grant application under Biden’s administration is just one way that dream becomes a reality.

Be aware of what’s available under your local and national governing body, to see what is possible. You may be surprised to find there are options that get you that bit closer to buying a property sooner rather than later.

Borrow money from family if available

While it’s not always something that’s doable, you might be able to borrow some money from your family. If you’ve got family who are willing to lend you money or even gift you money, then this can be great for helping buy your first property.

Borrowing from the bank of Mom and Dad, for example, is going to be a lot more beneficial than borrowing from a bank or other type of lender. Chances are, your mom and dad might discount your repayments or at least not charge you any interest for what you borrowed!

Do research on the property market

Before going to view properties and handing over your money, it’s important to do research on the property market. This is important because you don’t want to end up buying a property when the market isn’t really swinging in your favor.

Ideally, you want to buy during a buyer’s market, rather than a seller’s market. Sometimes though, there’s never an ideal time and if you’re desperate to get your first property, you might end up throwing caution to the wind and simply looking when you’re ready to buy.

However, it’s good to do research on the property market anyway to understand how much you should be paying when it comes to property purchases.

Look for an investment property as your first buy

Finally, if you’re looking for a first property, try to find one that’s a good investment. It might be one that’s on the cheap but it’s a fixer-upper. Or it might be one that is in a developing area that is likely going to increase in value, like a city for example.

Hopefully, with these tips, you’ll be able to get your foot on the ladder successfully as a first-time buyer.