This is what it's going to be...
The last few weeks have been a pretty amazing for me, if you have read my #deartuesday post you would have seen that I got my mortgage offer. (if you haven't read it yet, check it out here http://bit.ly/UagO47). I've been waiting for over a month for this information now. But, it finally means that I can make progress on my new flat.
In my life I really didn't think that I would ever be able to buy a flat, as you need at least a 20% deposit to get a mortgage, which is a huge amount of money. I never thought that I had been earning enough money to live in London, save some money and pay off the debts that I built up as a student. So buying a flat had always been out of the question.
In July last year I was speaking to my mum about my housing situation. I was living in a shared flat, which firstly was being sold by my landlady and secondly I had a housemate who was going through a few issues that were affecting all of us. I had always wanted to live in my own place and on my own for a while. You know the feeling when you just want a place where you can wander around in your pants, watch the TV you want to watch and do the cleaning when you want to.
My mum suggested that I take a look at the Shared Ownership scheme, where first time buyers can buy a certain percentage of a property and the rest of the property is owned by a Housing Association. You pay for the mortgage on the percentage you own and pay rent to the Housing Association who owns the rest of the property. For these type of properties you usually only need a 5% - 15% deposit on the section of the property you own. Which it an easier sum of money to save compared to the usual 20%. It would mean that I could have my own place where I could settle down. No one but me could sell the place from under my feet and the money I was spending was not going just going into someone’s pocket, but helping me up the property ladder.
It sounded too good to be true, but I took a look and found that I could get a brand new/newly built flat with a small amount of savings and at an affordable monthly rate. If I decided just to rent on my own, I would be looking at spending at least £1500 a month, but with this, I would be paying much less on a mortgage and rent. The places available usually are in upcoming areas of London and come with a few restrictions, but if you are happy to put up with that, you are all sorted.
So that was it, I visited a few places and somewhere affordable and in a location I was happy with. It was time to save for the deposit, so I moved back in the parents and the rest is history.
If I’ve got you thinking about doing the same, here are my tips to get you on your way:
1. Register with First Steps London (or look here to find your nearest place) and take a look at the properties available
2. Look at the different areas and work out how much you can afford to spend on rent/mortgage every month. Also add about £300 on top for bills, just in case. I made an excel document to track my outgoings and work it out. It was really useful!
3. Look at the required deposits and work out how much you have or can save on what you are on. Also, add on £4000 to the required deposit for legal fees, mortgage costs and for kitting out your new home
4. Take a look at a few places. Get a feel for what is available. Ask lots of questions, the housing association and developers are happy to help
5. Get your finances in order. Reduce your overdraft and pay off any loans or credit cards. The Housing Association and mortage company will look at your finances thoroughly. Most schemes will ask you to speak to a Financial Advisor, which is usually free until you get a mortgage. Again, ask lots of questions and don't be scared to tell them the truth. They want to help you
6. If you find a place you like, find out what the process is and how long it will take. Sometimes you might have to buy off a plan if the place isn't built yet.
7. Ask your friends or family for a good Solicitor. Ask them lots of questions. I was lucky one of my close family relations is a Solicitor.
8. Lastly, be prepared for extra and hidden costs. This could be ground rent or additional money for other things. Even though this is 'affordable housing' people are looking to make money from you.
Keep following this blog to see what happens next and how the move goes! If you have any questions, drop them in the comments below.
