Buying your first home

There are lots of things to plan for when buying a home. Some you may already have thought of, such as a deposit, and others you may not, such as protecting your income in case you become ill and can no longer work. You'll also have to bear in mind other costs including legal fees, stamp duty, surveys etc and not forgetting furniture, decorating and DIY.

Lenders are increasingly expecting you to have a large sum to put down as a deposit. If you need to save up for this and other mortgage costs, shop around for a savings account to suit you. You may get higher interest in a notice account, but make sure you can access your money when you need it.

If you find you can't afford a mortgage, check out what other options you have, such as part buy/part rent schemes.

Your lender will still expect you to continue paying your mortgage even if you can't work due to an accident, illness or redundancy. There are a number of products, such as payment protection insurance, you can buy to help with your repayments, but check when they pay out and how long for.

Most people need buildings insurance to cover their home in case it is damaged or destroyed. You don't have to buy it from your mortgage lender, so shop around to get the best deal for you. You should also buy insurance to cover the loss of, or damage to, the contents of your home, such as your furniture and electrical goods.

Once you're in your new home, work out how much you've got coming in and how much you'll need each month. If this is your first time on your own, you'll need to plan for gas and electricity costs. You can compare suppliers to get the right deal for you.

 

Top tips

  • Now is the first time in your life where you have a significant asset, it is never too early to write your first will.
  • If your new home is secured by your mortgage and you fall into arrears with your mortgage, then you could lose your home.
  • If you've get a mortgage deal for a fixed period, don't forget to check out what's available a few months before it ends to make sure you carry on getting a good deal and don't pay more than you have to.
  • You may be able to get a discount on your council tax if you're living alone, so check with your local council.

 

  • It's wise to review your budget regularly. If your circumstances change - perhaps you get a pay rise or your mortgage payments go up - look at your budget again to make sure it's realistic and that you're making the most of any extra income.
  • Use Money made clear's cut-back calculator if you find your money isn't stretching as far as you would like.
  • Don't forget to insure your possessions, you've worked hard to get to this position, think how difficult it would be if you were to lose them.

 

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