Getting on the Property Ladder – How to Afford Your First HomeBy MGB • Jul 2nd, 2012 • Category: Advice
Getting on the property ladder is a fantastic achievement and one that can fill us with pride and excitement when we manage it. This is financially a great move, meaning that you’re no longer practically just giving your money away to anyone, but it’s also highly liberating giving you more space and letting you use that space as you see fit.
There’s just one problem – and that’s that it is so incredibly expensive that you will likely struggle to afford it. And without much of a credit history to speak of and high loan rates this is made even more difficult when you’re buying for the first time. But don’t fear – you don’t have to live with your Mum or rent forever and there are ways around this problem. Here are some strategies to help you afford your first home.
Stay At Home a While
If you are single then consider living at home with your parents for a few extra years rather than renting. They may charge you some rent, but it’s unlikely to be anywhere near as expensive as renting a flat on your own, so this way you will be able to put aside a huge amount of cash each month and if you are strict with yourself this can be over 50% of your salary. If you earn $30k a year and you put $15 of that in the bank, then you’re only looking at a few years until you can afford that deposit.
If you still can’t afford to buy a home on your own then look into getting one with the help of someone else. You can move in with a partner for instance, or you can move in with a group of friends or people you just happen to know. Just make sure that the people you move in with are people who have the same plans as you and who you can get along with very well.
Ask for Help
You can also get help from parents, and if you offer this as an investment opportunity for them this can make life a lot easier. For instance try asking them if they want to put down a percentage of the deposit, and then just offer them the same percentage back when you sell. This way it feels a little less bad asking because at least you are offering them something worthwhile in return.
Look Into Your Options
There are various different options you can use that act as a kind of compromise should you be unable to buy your home out and out. For instance in some case it is possible to buy just half the home and this will suit some people well.
Lease / Rent Out
You can also rent your property out to other people for a while to help you with the mortgage repayments – and you might even be able to get them to give you a few months up front and a deposit which will help you again to reduce the cost of that deposit considerably.
Our guest blogger today is Michael King from yourlanzaroteproperty.com. Michael’s works with a leading Lanzarote based property website and is an expert in real estate business.