Today, and probably for the next few posts as this could be a long one, I wanted to talk about something that I am currently going through myself and which is all a little daunting; that is, buying a house for the first time!
I am 22, and in the next few months or less I will be a first-time buyer, owning my own home.
I currently live in a smallish village with my mum Deborah, in a little flat that she has owned for many years. My parents have always kept it as an investment for me, as they knew it would be difficult for me to work when I am older. They kept it so I would be able to support myself.
This flat is beautiful and quirky, but to be honest is not that safe for me to get around independently; which is why we need to move.
Cue the myriad stress, overwhelming panic, and absolute mayhem! We have been given a unique opportunity to buy a ground floor flat where we have always wanted to live, but there’s a catch. As it has been offered to us off-market by a friend we have to sell our place, get a mortgage, and complete; all within two months or less.
So I thought I would write this blog post to try and help anyone who may be a first-time buyer to find their feet and to try and clarify some things. By no means am I an expert. I have no financial background other then doing accountancy for AS so don’t take what I say as gospel, just a little bit of advice and guidance.
Where to start?
One of the first things you need to do if you looking to buy a home of your own is to work out what your budget is? There are quite a few government schemes out there to help first-time buyers and others, so it is worth checking what you need to make sure you can afford a mortgage (if you need one), what your maximum budget is, and what you can afford to spend.
After you have your rough figures sorted out it is important that before you go house hunting that you have mortgage agreement in principle, or have at least looked at what lenders are likely to lend you. It’s no good going house hunting and falling in love with a property if you later find you can’t afford it.
This can be hard, and for me it was twice as difficult, because I am on disability benefits as I am too unwell to work, I would love to work but I physically can’t, so this closed a lot of doors for me.
I used one of my local mortgage brokers who helped me find a lender who would lend to people on benefits like PIP, DLA and ESA (Personal Independence Payment, Disability Living Allowance and Employment and Support Allowance). This stage angered me, as only ONE lender would lend based on disability benefits. So how can a disabled person who can’t work own a home or be independent? I think it’s disgusting and discriminatory, but that a whole other blog post!!
Now I had to disclose all my income, any commitments (credit cards, phone bills, utility bills etc) and whether or not I had anyone dependent on me. Based on my income multiples, which is usually your yearly income x 4.5, I would be told the amount I could borrow from the lender. The original plan was for my mum and me to go on the mortgage together, but as she is 55 we could only get a mortgage for 14 years. This was not cost effective, so the best thing for me to do was to apply in my own right.
This is where it gets a little stressful. As I said, my income is made up of disability benefits. I have to provide proof of my benefits and that they are long-term and permanent and are not going to change. Then it is a waiting game. You have to send all proof of income, and official documents to prove who you are, for an underwriter to assess whether or not you can indeed get the mortgage that you have applied for.
As it stands now, we’re in a little bit of limbo-land. We’re waiting for the mortgage company to approve the mortgage and waiting to find out when our official moving date will be. The waiting is PAINFUL; we can’t wait to move and hopefully it will be before my end of year Uni. exam comes and the summer truly kicks in.
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(Any opinions expressed in Charlotte’s blog are not necessarily shared by Arthur’s Place. Nothing that you read in Charlotte’s blog constitutes medical advice.)