As A General Rule Of Thumb The Mortgage Repayments Should Be Less Than 35% Of Your Total Monthly Income

Category: Finance, Real Estate.

The property situation in the UK has been steadily rising for many decades now, but finally it seems slowing down and possibly the reverse happening.

Either way it is making everyone a little nervous and more reserved than usual. Currently the market is very unsteady, some experts predicting a slight recession whilst others saying it's merely a slight hold up before continuing to rise again. Due to the unease it is the perfect break for the opportune developer looking to jump on the ladder. However before you jump straight in and start manically house hunting, bear in mind the following factors first, and in particular the hidden financial costs that can ruin any potential development by sapping up the whole budget! As less people are investing, you will find more attractive offers that you can seize and capitalize on. Firstly decide on a suitable mortgage that will allow the cash needed to buy a property and do it up, but does not, if necessary cripple you with excessive repayments. Remember mortgage lenders will generally lend about 3x your salary, however if you opt for a joint mortgage it is possible to get approximately 5x your combined salaries.

As a general rule of thumb the mortgage repayments should be less than 35% of your total monthly income. According to recent figures, first time buyers are priced out of 80% of the towns in the UK. Teaming up can make investment much safer, easier and less stressful especially making redevelopment less work. This is a very daunting statistic for any first time buyer, which explains why more and more are opting for help from another party, be it a family member or friend. Unfortunately more often than not will cause disagreements and in the worst possible scenario a complete break up between both parties. There are many mortgages available, from many different lenders, tailored to suit different peoples needs.

In any case it is essential to draw up a valid, detailed contract that clearly states what happens if one partner wants out. If you are not an expert, it is worth seeking an experts advice, the advice received should outweigh the cost of choosing the wrong mortgage and being stuck with it. Also remember to take into account additional factors such as the interest rate, lock- ins and redemption penalties. One simple point to note is that, the more deposit you can lay down initially, the better mortgage deal you will be able to negotiate. Whilst going through the process of purchasing an' average' house, worth approximately 217k the purchaser will incur approximately 4250 of additional costs, including: Mortgage arrangement fee. Solicitors fee.

Land registry fee. Stamp Duty. And on top of that building and contents insurance is a definite must. Valuation service( from lender) Structural building survey. Considering most developers thinking about refurbishing a property, need to keep, to add value costs down to a minimum, this could seriously affect the rest of the budget. What's more Deputy Prime Minister John Prescott has recently revealed the government has set aside 600m to fund cut price housing to help first time buyers. However with careful and thorough planning and a sensible budget, there is no reason not to invest in your first property.

In conclusion I say do not hold back, in fact use these unsettled times in your favour, make the lenders compete to win your custom, find the perfect first time investment and jump straight on the property ladder!