If you’re on a low-income salary, the dream of buying your own property may seem unreachable. It can take a significant amount of cash up front to be in with a chance of being accepted for a mortgage. Saving for a home deposit is one of the hardest financial tasks you can undertake, and as someone who isn’t receiving much of a pay packet, you’ll need to be strict on yourself. But, if you’re willing to take on the challenge, here are a few tips to get you started.
Cut Down on Luxuries
Unfortunately, buying your own property means having to do some serious saving. One of the best ways to do this is to put aside money each month and watch it build. However, it isn’t always easy. Without a significant sum of disposable income, it’s difficult to put money aside. And, any disposable income you do get is often spent on take-aways or other treats that you rightfully deserve. So, the only way to save is to avoid spending money on take-aways and other luxuries the majority of the time. The odd treat throughout the year is important for your mental health because going without any rewards can be a bit depressing. But making sure you put as much money aside as possible every month will get you the property you want a lot faster.
There’s no harm in doing property searches before you’re ready to buy. However, there’s no point on getting your heart set on properties that aren’t within your financial reach. The most you can get from any lender is four times your annual salary. So, if you’re on a low income, you need to think about the amount you can actually afford. If you do want a large property, you’ll have to accept that you may be buying that property in a run-down state or you’ll have to wait until an auction opportunity presents itself.
Help to Buy
There are some mortgages and schemes that have been set up purposely to help people with low incomes to buy properties. Find the best home loan calculator and use it to figure out how much you could borrow. This also works for anyone wishing to remortgage a property. Once you know what you could borrow, you’ll have a better idea of the type of deposit you’ll need to save and the length of time you’ll need to pay off your mortgage. There are certain schemes that may be able to help you buy by adding money to your deposit or buying the home with you. Your local council will be able to give you more information.
Buy with Someone
It can make it much easier if you buy a property with someone else. Having the addition of another salary can double your buying potential. If your potential mortgage doubles, it gives you a lot more scope when it comes to searching for the ideal property. It may be that you buy your first home with your partner, or perhaps a friend or family member is willing to buy with you as an investment opportunity. However, if you intend to keep the property for self, you will need to repay the money at some point down the line- perhaps when you sell the property on in the future.
Buying your first property is never as easy as 1, 2, 3. There are complications to the whole process that you may not foresee. For example, even though many people manage to save the initial deposit, some might forget to put aside money for solicitor’s costs, stamp duty, tax and any refurbishments that need to be made. Getting advice from a financial advisor that’s been in the business for a while and has good reviews will help you get into the right mindset for purchasing a property.
Always Survey Properties
You may be looking for a home that’s newly renovated or in good shape so you don’t have to make any changes before moving in. For people on a low income, that’s mainly because of the added cost of having to refurbish. So, you don’t want to buy a property just to find out that it needs more work done that you initially thought. Getting a thorough survey on the property should give you a good indication as to what will need refurbishing straight away and what you can expect a few years down the line.
It’s not impossible to buy a home on a low income, but it’s certainly not easy.