If you asked me a few years ago anything about deposit, mortgage or credit score, I would open my eyes wide and I’ll be like..erm what? I had no clue what some of the terms meant, neither I was interested in becoming a homeowner.
It all changed now. I left my university and moved to a rented flat. Despite that I like my little apartment, of course, I dream about my own. After I have finally managed to pay off my overdraft and I am now making my steps toward owning a home. I started researching slowly and getting my head around things like what I need exactly to be able to own my home. I have posted a few months ago a girl’s guide to a property ladder where I have talked you through all available schemes to become a home owner. Perhaps, you remember my post about the reality of living in a rented apartment where I talked about how it really is to be renting. Since then, my circumstances slightly changed. I was working then as a full-time interior designer on a graduate salary and now I just work from home.
Despite that I am more on a survival stage rather saving, I know that once I get back to a full-time job as an interior designer, ( perhaps on a better salary than graduate) I will be able to start saving ( and read here my girl’s guide to saving money. I have learned now, how to switch on saving mode which was my biggest sin, plus once I start selling my stuff on eBay and Preloved, hopefully, will be able to start saving even more.
I have now made a list of all things I need to know to become a homeowner. For me, it’s all first steps so don’t worry, I am not that smart pants lady who got her home and share bits, I wish, though. I am slowly preparing myself for it, with you. So girl, you can think to become a homeowner too 😉
- Checking your credit score. This is something I had no clue about it before. I have recently learned what credit score is. Basically, it’s a number from 0 to 999 which is defined by banks and lenders for you. The higher the number the better, so 999, for example, shows that you are an excellent potential borrower. Most companies will charge to check this and you can do it for free on ClearScore. However, you have to check your credit report and make sure your rating are well too. If your score is low you have ways of improving it by making sure you don’t miss any payments but there is a lot more to it and you can check various ways how to improve your credit rating with MoneySavingExpert.
- Start saving. No deposit- no home. Depends on of the scheme you decide to take your mortgage you have to have your savings of at least 5%, 10% or 20% of the house price. I have talked already how to save money on food and you can just check my post how to save up money in general (link in 3rd paragraph) You can start saving by Instant Cash ISA scheme or Help to Buy ISA, read carefully best cash ISA post to decide which is best for you.
- Repairs/improvement. Think of your budget and living cost as well as how much mortgage you will be paying. Don’t forget you have to pay bills and while renting you get all repairs by your landlord. Here you have to be prepared for any accidental damages, or your electricity bills as well as your usually spending. Prepare a list of your spendings and a good practice is to keep a diary for at least 3-4 months writing down all your spendings to see where your money goes. ( this will also help cuts). Before you move in you will need money for decorating and repairs unless you taking a brand new home but still, you want to paint that wall pink, don’t you? and paint cost money.
- Sign up to a government scheme. Government and companies want to help us a little and created several schemes from rent to buy, shared ownership and more so read my girl’s guide to a property ladder where I explained these schemes more. (again link in 2nd paragraph)
- Rates. You also have to know there a difference between fixed and adjustable rates and which is better for you.
- Pre-approved. It’s good to know whether you actually be able to get a mortgage so you can get now pre-aproned which means if you get an evaluation of your financial situation. Having that letter from a lender (bank for example) will help sellers to accept your offer.