Moving from renting to buying – what to look out for
Most renters would prefer to own a home. Owning a property means not losing what many people call “dead money”. If you’re taking out a mortgage, the home will be yours to keep once it is paid off – and what’s more is that you’ll be able to do pretty much anything you like with a home you have paid to own. Nonetheless, the transition between renting and owning a home can be tough, so let’s take a look at some of the main things you’ll need to look out for.
What is your credit like?
Before you start to look for homes to buy, you should ensure that you have a good credit rating – unless you’re one of the fortunate few who have the money to buy a home outright of course. The banks will only lend to you if they think you’ll be able to keep up the repayments, so it’s best tohave a steady income and pay off as many existing debts as you can before you take out a mortgage. The better your credit score is, the lower interest rates are likely to be if the banks do agree to your plans.
What can you afford?
You should get a firm idea of how much you can actually afford before you head to the estate agents and ask them to help you look for homes. If an estate agents knows what your price range is, they will know which properties to suggest to you. Before you agree to buy a home, you’ll need to get the property surveyed. A surveyor will take an in-depth look at the property to identify problems you can’t see or issues you haven’t been toldabout. Always ask as many questions as you feel you need to before you agree to purchase a property.
Have you caused damage to the rental property you’ll be moving out of? It’s best to keep something aside for any repairs you may need to pay for before you exit the property to avoid a dilapidation claim. This should help you avoid losing your deposit, which you’ll probably need as you make the challenging transition from renting to buying. Whether you’ve caused structural damage or broken some of your landlord’s appliances, it’s alwaysbetter to put things right before you move out to avoid having to pay out more after you have left. It’s best to reach property dispute resolutions as soon as possible so you can move onto the next chapter.
Have you thought about all the costs?
You will also need to think about extra costs as well as your mortgage repayments. Insurance, repairs and taxes are all part and parcel of owning your home, so get as much first-class, accurate advice as you need before you sign on the dotted line. Remember that you’ll have to pay for any repairs once you move on. Whilst you will have been able to simply call your landlord beforehand, you’ll have to resolve any issues including broken-down boilers, damp, leaks or broken appliances yourself. You’ll now be the one who has to pay for the services of electricians, plumbers and any other tradespeople, so make sure your money will be able to stretch to this. Take out as many insurance policies as you need to so you’re covered if something does go wrong. Remember, by not paying out for repairs, you could be making the situation worse and you may be putting your and your family’s safety at risk. Not all repairs are optional.
Is your monthly payment cheaper?
Monthly mortgage repayments can be the same or even less than what you paying out in rent, only you’ll be paying towards the home instead of covering someone else’s mortgage for them. House prices have shot up over the years, so you could make a tidy profit if you treat the property with care and sell when the time is right. However, many first-time buyers have had their fingers burned by entering the market carelessly and not doing their homework.
Consider your options
Take time to find the best lender and think about yourfuture needs. Do you have children, or are you planning on having them in future? Is the property located near to a reputable school? Will you be able to get to work easily? These are just a few of the questions you’ll need to bear in mind before you seal the deal.
This article has been written on behalf of leading law firm in Kent, Whitehead Monckton. Whitehead Monckton can provide friendly advice to clients in the local area struggling with property disputes and dilapidation claims or requires conveyancing and residential advice. For more information visit the Whitehead Monckton website.