Taking the first step on the property ladder is cheaper than you think
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Taking the first step on the property ladder is cheaper than you think

We all know how notoriously difficult it is to take that plunge and get onto the first rung of the property ladder, and with house prices back on the rise, more young adults than ever are opting to stay in their parental home whilst saving. However, even amidst rising house prices, first time buyers struggling to get on the property ladder can now buy a new two-bedroom home in Hartlepool with a mortgage which will cost them just £230 a month; making it the perfect first step on the property ladder.

National house builder Keepmoat is offering customers with a salary of at least £14,000 a chance to own a £79,995 home at its development at Alexandra Square in the town centre of Hartlepool. The homes, which are available under the government’s Help to Buy scheme, can be purchased through a 35-year mortgage product, perfect for customers on modest incomes.

The exceptional value of the homes available at Alexandra Square mean local people can now aspire to buying their own home, with potential monthly mortgage repayments as low as £230. Even with the falls we have seen in property prices in recent years getting on the housing ladder can be difficult for those who do not have substantial incomes. Combined with Help to Buy it makes purchasing a new home an increasingly attractive proposition for first and second time buyers. And with a choice of homes on offer at Alexandra Square there’s something for everyone, whether families or young professionals.

Alexandra Square is a development of 83 two and three-bedroom homes located within 10 minutes’ walk of Hartlepool Marina with its boats, watersports, attractions and mix of bars, cafes, shops and restaurants. The development is also in a good catchment area for schools and transportation links. The new homes offer great access to nearby Hartlepool town centre as well as Durham, Sunderland and Middlesbrough.

Alexandra Square is part of a £9 million regeneration scheme, which is a key to the North Central Hartlepool Masterplan, and is being funded jointly by Keepmoat, Hartlepool Council and the Homes and Communities Agency (HCA). For more information or to reserve your dream home, please visit check out Keepmoat’s website.

Copyright free image courtesy of pallspera

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Three step guide to mortgage research
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Three step guide to mortgage research

To many, taking the plunge and grabbing onto that first rung of the home buying ladder is a big and extremely scary step. One of the most important plunges in life can be securing a mortgage, as it’s not something that you’ll forget about, and will inevitably lead to years of repayments. Whilst is can be a scary process, securing a mortgage and buying your first home is also one of the most exciting life experiences. If you’re looking to secure a mortgage, here are our tips on how to make the correct decision.

Step One: Check out your current financial providers

As a starting point, to provide you with an initial idea, it’s worth contacting the banks and building societies who already provide you your current and savings accounts. If that’s more than one bank, then check with them all and begin to work up an idea of what offers are available to you. We aren’t guaranteeing anything, but from time to time, if you have accounts, previous mortgages or other connections with a bank, they can offer you a more attractive rate. Obviously, if you ring your bank, they’re going to give you a fairly one sided set of options, as they undoubtedly push their products. Make sure that all information provided is then noted down and researched further, to ensure you know the ins and outs of each option. Once you’re in the know about the options provided by your current banks and building societies, you have a solid base, and can begin to shop around to compare deals.

Step Two: Analyse the market

The next step for you to take is to gauge the state of the rest of the market. There are a load of great online tools for comparing finances, so make sure you have a good study of the available options from other high street providers. It’s not as simple as one option standing out above the rest, as most mortgages offer tailored features depending on what your financial situation is; many have a range of differing features and charges that you’ll need to consider, so make sure you do your due diligence and give your research phase plenty of time.

What to look out for: The Annual Percentage Rate is one factor that is important when you’re assessing options on the market. This figure takes into account the cost of fees on top of the interest rate quoted – for example booking and arrangement fees, valuation fees and other add ons. Obviously, finding a low rate that suits you, and ties in nicely alongside all the other aspects of a mortgage is of utmost importance.

Dates of significance throughout the life of your mortgage: You need to make sure that you’re aware if there are any dates where fixed, capped or discounted rates will come to an end.

What rate you revert to after any initial rate ends: If an option does have an initial discounted rate to start, you need to ensure you’re aware of what rate it will drop to once the introductory rate comes to an end.

How flexible are payments: One option that may be available to you is to select a mortgage with flexibility. It’s important to know whether you are able to make overpayments without being penalised with a charge.

 

Step Three: Talk to a mortgage broker

If you feel out of your depth when it comes to hard hitting finance, the best option you have available is to get in touch with an independent mortgage broker to provide unbiased help and information. Generally, mortgage brokers fall under two general categories. Firstly, there are brokers who offer advice scoping the whole of the financial market, entirely independently. This means that any advice will be given in your best interest, without attempting to steer you in the direction of particular service providers. There are also, however those which offer a restricted service – based on products from a limited number of lenders. Whilst both are entirely different from advisers in a bank, you should opt, if possible to speak with a broker who advises over the whole market.

Taking on board these expertise are a vital aspect of the selection process, and for a relative financial rookie, it’s definitely a wise move.

Are you a new home owner who has recently secured your first mortgage and home? If so, we’d love to hear from you, and be sure to add any possible pieces of advice in the comments box below!

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Avoiding mistakes as a new home owner
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Avoiding mistakes as a new home owner

First-time homebuyers may not have the burden of a house to sell in difficult times, but they can still make a lot of mistakes during the buying process.

Leaving Financial Planning for Later

There are a lot of online calculators and tools to help you determine how much you can truly afford before you start the buying process. Here’s a great mortgage calculator by The Nest. However, when you start getting serious about buying a home, you need to know exactly how much you can put into a house and hopefully, get pre-approved for a mortgage.

DIY Home Buying

With all the classified listings out there, along with websites like Craigslist and apps like Zillow, you may start looking at homes ages before you ever contact an agent. But wait, do you even need an agent? Can’t you just figure this out on your own? Well, maybe, but buying a home is an incredibly complicated process, and it helps to have a real estate agent to coach you through the ins and outs of financing, scheduling inspections and making an offer.

Falling in Love Too Soon

Many first-time buyers become enamored with one particular property and suddenly it seems like they’ve just got to have it. But, this is a bad idea where home buying is concerned. Not only can falling in love with a home make a difference with the real estate agent — they’ll make you pay for it — but you can be setting yourself up for heartbreak if it isn’t in your budget or another buyer makes a better offer.

Renovating Too Soon

Even if you don’t let yourself fall in love before you can afford it, you may come into the home with a very specific work-in-progress vision for your home. Maybe you want to remodel the kitchen right away to make it the airy, open-plan cooking space you’ve always dreamed of. Maybe you want to add a conservatory or tack on an orangery.

The increase in value to the home will practically make these renovations pay for themselves, right? Well, it may not have the effect you were hoping for. In this unpredictable market, you never know if making upgrades will reap the rewards you’ve been hoping for or be a thousand pound mistake in the making.

Forgetting That There’s More Than the Mortgage Payment

First-time homebuyers may know what they’re getting into as far as the monthly mortgage payment is concerned, but there is so much more to homeownership than your mortgage. Suddenly, you’ve got additional taxes, home insurance, higher utility bills and maintenance to contend with. These things can overwhelm those used to renting.

Be sure to estimate the cost of living, as well as the mortgage payment before you close on the deal. There are a lot of ins and outs to buying your first house and you’ll always run into things you didn’t expect or plan for. Fortunately, if you avoid making these five common mistakes, you are well on your way to finding the home of your dreams at a price you can afford.

Photo Credit: MarkMoz12 via Compfight cc

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Saving tips for new home owners
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Saving tips for new home owners

As a new home owner, finances are sure to play a large part in your life at the minute. From worrying about outgoings when working on your new home, to stressing over the best means of saving your cash, money worries are a common problem in any household.

Identifying the best way to save is never easy, and we could all do with some help from time to time. If you’re not sure where to start when it comes to saving, then your best option is an ISA. Everyone over 16 in the UK can put up to £5,940 in a cash ISA this tax year, and it’s extremely handy and efficient as it’s a savings account where you don’t pay tax on the interest. When selecting the best ISA to suit your needs, don’t make a rushed decision; you don’t need to just use the same bank as your current account is with as you could be missing out on higher interest levels. On the market at the minute, you can get up to 2.75%, This figure has substantially dropped over recent years, however so if you’ve had an ISA in years gone by that is still open, you might want to check the rate of interest they’re generating, as it is sometimes the case that utilising an old ISA can generate you a greater rate of interest.

No Tax

Cash ISAs are simply savings accounts where the interest isn’t taxed, meaning it’s incredibly rare for a normal savings account to pay more interest.

For a cash ISA paying 2% AER to be beaten, a basic-rate taxpayer would need a savings account offering 2.50%, while anyone paying higher-rate tax would need 3.33% – and those accounts currently aren’t out there for the vast majority of people.

Just like normal savings accounts, there are a variety of cash ISAs available, such as instant access, fixed rate, and accounts with base-rate guarantees. You don’t have to pay to open a cash ISA. For details of the best payers, read Top Cash ISAs – updated daily.

 

Top high street offer

To many, the word savings means putting cash into an account and being unable to withdraw it again, however this doesn’t have to be the case. All high street Instant Savings Accounts have a limit on the amount of money you can save, however nearly all of them also offer withdrawal capabilities. Easy-access cash ISAs mean you can take out your money when you want it, which is perfect for gaining interest whilst also being able to withdraw for new home essential needs, such as decoration and furniture buying.

The best offer on the high street in terms of interest rates is the 2.5% AER account offered by Nationwide. Allowing you to deposit up to £1,250 per month and make unlimited withdrawals, the account can be managed both in branch and online.

Please be aware, this info does not constitute financial advice on our part, always do your own research on top of any ideas provided at First Home News

Photo Credit: @Doug88888 via Compfight cc

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5 mistakes to avoid when buying a new home

5 mistakes to avoid when buying a new home

Buying a home can be both exciting and stressful. On one hand, there is nothing like achieving ownership of your own personal space. It is the area that you will create dozens of memories and maybe even build or grow your family. On the other hand, it is stressful because in many respects, buying a home can leave you in an unpromising financial situation. However, this does not need to be the case. While most homebuyers make serious negotiation errors during the process of buying a home, these mistakes can be avoided. Below you’ll find the top 6 mistakes that you should avoid. This way, you can be sure that you are getting the best deal for your dollar.

 

Pre-Purchasing Home Inspection

One of the biggest and most serious mistakes that homebuyers make before signing on the dotted line is opting out of getting a professional to do a thorough home inspection. Naturally, when purchasing a home, homebuyers will also allocate funds towards remodelling rooms and new furniture. However, without a pre-purchasing home inspection, the new homeowner ends up finding that there are dozens of structural issues with the home. You can avoid this issue by hiring a professional to conduct a pre-purchasing home inspection.

 

Pricing

Another common mistake that homebuyers make, especially when purchasing without a real estate agent, is that they will easily overpay for a home. While not doing a pre-purchasing home inspection leads to overpaying, so does not reviewing the pricing of homes in the area. Therefore, to make sure you aren’t being overcharged, do some research and review the prices of homes in the area. It will give you an idea of range you should be paying in and give you negotiating power when talking with the seller.

 

Feelings

For some people, masking their feelings can be especially difficult. However, keep in mind that it is crucial that you remain neutral when viewing a home. Showing enthusiasm and love for a home during a viewing or through the negotiation process can spell trouble. Usually, the seller will notice your feelings and gain the upper hand, which will result in you paying more.

 

Seller Motivation

One trap that many homebuyers fall into is to not question why the seller has put their home in the market. While in some cases, the seller wants to move elsewhere, it can also be the case that there are other issues. Therefore, in order to protect your investment and add to your negotiating power it is a smart move to ask why the seller has their home on the market.

 

Keep Your Options Open

Sometimes, home sellers notice when a homebuyer is desperate to buy a house. This scenario immediately increases the seller’s power, and reduces your negotiating chances. Also, you do not want to put all your hopes into one home. Thus, when searching through homes, it is best to keep your options open. Look through a number or properties and make a list of your favourites. This will help you keep calm when facing negotiations with a homebuyer and increase the chance that you’ll get the property that you want for a fair price.

 

Author Bio

Brad Porteus is the Managing Director of BSP Construction Consultants, investment property inspection specialists in Perth, Western Australia.

Photo Credit: kevin dooley via Compfight cc

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What is the Help to Buy scheme?

What is the Help to Buy scheme?

Most of us dream of owning our own home at some point in our lives. We see it as an investment in our future, an end to the profligacy of renting and a place to make a nest for a family. However, the spiralling price of properties and recent financial crisis have made it increasingly difficult for many people to afford a house. The new Help to Buy scheme, introduced by the UK government, can help to people get on the housing ladder, with as little as a 5% deposit. But how exactly does it work and what are the options and terms of the deal?

Equity loan

With this option the government lends you 20% of the overall cost of the property, meaning you’ll only need to find a 5% deposit and apply for a 75% mortgage. You won’t be charged any fees on this 20% loan for the first five years of owning your property.

So, for a property that costs £200,000:

  • Buyer’s 5% deposit will be £10k
  • Government’s 20% loan will be £40k
  • 75% mortgage from lender will be £150k

Mortgage guarantee

The government will guarantee part of a mortgage given by a lender, meaning they are able to offer you higher loan-to-value mortgages, of around 80-95%. You are still required to pay back all of the mortgage as agreed with your lender.

For a £200,000 property:

  • A 5% deposit would be £10k
  • Government guarantees a % of loan
  • Higher loan-to-value rate of 95% possible from lender

Housing options

You can also take advantage of some other government schemes to help you get on the property ladder. These include the shared ownership scheme, which is a part rent/part buy deal, with special options for older or disabled people. The Help to Buy scheme applies to council tenants who have five years residency, entitling them to discounts when purchasing the property. The NewBuy scheme applies to newly built houses from developers taking part in the scheme. The aim of the Help to Buy scheme is to try and give people a helping hand to get themselves established in the property market. Recognising that for many people, even the average house prices in their area are proving difficult to reach. So, with an equity loan, mortgage guarantee or other housing options from the government it may be possible to now achieve your goal.

For more information and news on the Help to Buy Scheme, please visit WhatHouse.com who are a specialist property portal featuring thousands of homes for sale across the UK.

 

Photo Credit: Diana Parkhouse via Compfight cc

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Understanding bank accounts
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Understanding bank accounts

As a first time home buyer, there’s probably no current aspect of your life as important as money. We know that the home buying process is a costly one, and once the home is secured, we know you’ll be pricing up furniture and decorations. If you’re struggling to wrap your head around your finances and want some tips on keeping your money safe, we’ve got you covered with some basic advice.

Decide how you want to deal with your bank

We all live at a fast pace nowadays, and whilst sometimes it’s unavoidable to head into your nearest branch, for the most part customers like to be able to control their finances at the touch of a button. Most banks now offer services online, however some are easier to navigate than others. Before you jump into your decision, check out the online banking services offered by banks, along with their tablet apps if you’re wanting high speed access with great ease of use.

If you prefer to conduct your banking over the counter at your local branch, then you need to make sure you have regular access. It’s all well and good selecting a bank and opening a current account online, but if you encounter problems and need to speak to someone face to face, you need to make sure you aren’t required to trek miles out of your way.

Know the features of the account

If you’re just after a standard current account with no frills, then you’ve got hundreds of options to chose from; however many accounts offer features and bonuses to assist your financial situation. It could be something as simple as an interest free overdraft which not all account have, to something more lucrative like cash back. If you’re coming off the back of a big house purchase, money won’t be flowing as freely as you’d hope, so an interest free overdraft, just to be utilised whilst money is tight could be a godsend. Shop around and view the overdrafts on offer at different banks and see which best suits your needs

Incentives

In an age where bank account choice has never been stronger, many banks are now looking to lure you in with deals. Make sure you check out what deals you can get before opening an account. Things like cashback accounts now offer to pay you money back on purchases such as groceries and petrol, and other banks even offer you cash to switch to one of their accounts. Make sure you shop around, and take advantage of the deals on offer.

Bank accounts for students and graduates

If you’re still a student, or are a recent graduate, then there are special accounts still available for you which offer things like overdrafts and freebies. The Young Persons Railcard has always been a popular sweetener for banks when it comes to luring in custom, and things like restaurant discount cards and gadget insurance are also available at banks, as a means of saving you money.

Compare different accounts using comparison sites

Once you’ve weighed up options and garnered what benefits and drawbacks all the different accounts have, head to a comparison site to compare your options for one last time.

Photo Credit: Håkan Dahlström via Compfight cc

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How to save for the deposit on your first home

Guest Post

Thanks to the author of Moneystepper blog, Graham Clark, for the creation of his article exclusively for First Home News. 

Graham is a qualified accountant, avid money saver and wealth creator, who has published an e-book entitled: ‘Becoming Rich: One Step at a Time’

The Moneystepper blog provides small ways to save money by giving ideas and theories applicable to the majority of people, each and every day.

 

Pink Piggy Bank

Saving for a deposit on your first home is tough. Unfortunately, the media doesn’t make it any easier with their “shocking” headlines:

“House prices: First-time buyers need to save for up to 30 YEARS to afford deposit” – The Mirror (19 June 2013)

I have some good news and some bad news. The bad news is that saving for a deposit is not easy. Luckily, the good news is that it is not nearly as hard as the media suggests.

Help is at hand

Thanks to the government’s “Help to Buy” scheme, first time buyers (assuming suitable affordability) only require a 5% deposit to get onto the housing ladder.

According to the Office of National Statistics, the average house price for a first time buyer in 2013 is £184,000. We therefore need to save £9,200 for our deposit. As the buyer, we will also need to pay a 1% stamp duty on a property of this value, adding another £1,840, and approximately £1,000 for legal and other costs.

So, in total we need to save up around £12,000 to get on that ladder! This seems daunting, but hopefully it will be less daunting after we follow the 4 easy steps to save a deposit for a first home.

1)     Cut your expenses

You may think you live on a shoestring. But then again, you spent £40 last night when you went out for dinner with your friends. Oh, and £30 in the pub last Friday. Oh, and £40 on those new shoes last week. Oh, and £80 on your partner’s birthday present last month. Oh, and…you get the picture!

The average person in the UK spends around £300 per month on food, £260 per month on leisure and £100 per month on tobacco and alcohol. For the next 2 years, you are going to have to cut back. Meet your friends at home rather than in the pub/restaurants. Make those old shoes last another few months. Give you partner free love for their birthday!

In other words, be frugal, and cut your expenditure in these three areas by one third. But, don’t fear. Frugal is the new cool.

Saving: £5,280

Effort: minimal

 

2)     Earn additional income

With the rising cost of, well, quite frankly everything, it’s not going to be possible to find the full £12,000 through cutting expenses alone. Instead, you can earn additional income and there are a million ways to do so:

  • Earn a promotion or pay rise
  • Give private lessons/tuition
  • Babysit
  • Mow lawns
  • Wash cars
  • Write articles online
  • Take surveys
  • Sell your junk
  • Rent out your parking space
  • Advertise your car
  • Become a mystery shopper
  • Enter online competitions
  • Iron clothes for friends & family

The list goes on. With just a few extra hours work, you should be able to earn an extra £100 per month.

Saving:  £2,400

Effort: moderate

3)     Save on rent

The average monthly rental in the UK for a two bedroom property is approximately £400 per person. Therefore, as humbling as it seems, moving back in with your parents for 6 months may be a wise decision.  I know, no one wants to move back in with their parents.  However, you need to remember this is just for a transition period before you achieve your dream to get on the property ladder. Trust me, it’ll be worth it!

Saving: £2,400

Effort: depends on your parents!

4)     Don’t go for the average

The problem with the average is that it includes all those people buying a house because Daddy has given them the money, or they have benefitted from an inheritance, or they star in Made in Chelsea! Wherever you are in the UK, you should be able to find an adequate first time home for £150,000 or less.

Saving amount: £2,040

Effort: None

And voilà: 4 simple steps followed for 2 years and we have saved a £12,120 deposit for our first home.

Good luck and happy saving!

Images used under creative commons courtesy of Ken Teegardin.

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The best five ways to save for your first home

The best five ways to save for your first home

If you’re dreaming of getting onto the property ladder, but saving enough for a deposit seems a lottery win away, you don’t need to worry. We all know how difficult it is to get your first home, and with the prices of a home nowadays you probably need all the help you can get. Don’t worry, we’re here to provide you with the best tips and money saving advice if you’re saving for a deposit.

Stop renting

If you already have your own rented place, and finally take the plunge and buy a home outright, then it might be time to pack in your rented property and save the expense. Obviously, for this to be a viable money saving option you’ll need somewhere else to move into rent-free, or at least somewhere at a reduced rate. The classic option here is to move back in with parents for a few months whilst you sort out your finances, but if that isn’t an option, moving in with friends and splitting rent and bill costs can also be effective.

Downsize

If you still need to rent a place to live but still plan to save funds for a deposit then downsizing for a short period of time might be the way to go. It won’t see the quick saving returns of living rent free, but it’s the next best option. Moving to a smaller place is a good option, and you may even come to realise you don’t need all the excess space you had before. Check out cheaper areas for living too, and you might even be able to maintain the size and quality you’ve been accustomed to.

Get help

You might not be aware, but there are options available when it comes to getting help as a first time home buyer. Depending on your profession there are government led schemes designed to aid you get on the property ladder. Check out options such as the government backed Help to Buy equity loans, which allows you to take a loan of up to 20% of your the value of your new property, and also means you’ll only need to save up a 5% deposit, then  you’re all set.

Spend sensibly

It might seem like an obvious suggestion, but cutting back on your expenses will see your deposit funds steadily increase. Begin to monitor your outgoings and consider which are truly necessary and which aren’t. It’s great to head out a few times per week for meals or to see friends, but it siphons away cash you could be putting to one side. If you’re serious about building a nest egg to use on a deposit, you’ll gladly forfeit a few Friday night drinks, or a new pair of jeans to help your deposit fund.

Possessions

It might not be a good option for raising vast funds, but selling items on eBay can be a good way of adding to your total. Don’t expect to become a millionaire entrepreneur from being an eBay seller, but it can be a good help to break the back of your target goal. eBay gives you a solid platform to turn your excess possessions or junk into well earned cash, and is an easy way to strengthen your financial situation.

Obviously there are plenty of money saving tips and advice available, so feel free to let us know what worked for you.

Image used under creative commons courtesy of Tristan Martin.

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Lorem Ipsum
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Lorem Ipsum

Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

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