Owning your own home will be the biggest financial commitment you will ever make but with rising house prices this is proving more difficult for people wanting to get onto the property ladder. However, it's not impossible it just may take longer to save for a house deposit depending on your personal circumstances.

A first time buyer looking for home ownership will need to do some market research in case house prices rise, the average property price has increased in the last few years. Rental payments have also increased due to the mortgage interest rates rise, this is so landlords can make a profit whilst also paying their monthly mortgage payments.

Paying Monthly Mortgage Payments

If you are looking to buy a house you need to consider all relevant costs and budget accordingly. Housing costs have increased whether this is upfront costs, mortgage fees, legal fees or certain mortgage deals. Generally speaking, it is harder for first time buyers to get onto the property ladder due to the increase in house prices, however, it is still possible with careful planning and budgeting.

Your deposit will come down to how much disposable income you have available if your deposit is via savings, if you speak to a mortgage broker they will conduct affordability checks using a mortgage affordability calculator, most mortgage lenders have these on their websites that we have access to. This will tell us how much your monthly mortgage payment will be when we assess your current income and outgoings ratio.

Advantages of Buying a House

Investment - This will be the biggest long term investment you will ever make and your monthly mortgage repayments will go towards your own mortgage rather than paying off a landlord's mortgage with rental payments

Security - Once you have moved into your property you can't be made to move out as long as you keep up with your monthly mortgage repayments

No restrictions - You can decorate the property however you like and you can also own pets without having to ask permission first

Control over payments - When you apply for a mortgage you decide how much you would like to pay towards your mortgage and over what term. If you purchase a property mortgage-free this doesn't apply

Disadvantages of Buying a House

Less flexibility - You are able to move out whenever you want to but it isn't a fast process when you have a property to sell, this reduces your flexibility of being able to pack up and move as and when

Property market - The property market can change and is very uncertain at times, house prices can fluctuate, and the housing market can be busy but can also slow down when people decide not to sell which means you will be looking for a property longer than you may have anticipated originally

Financial commitment - Buying a house is a huge commitment and you need to keep up with all monthly repayments or your home may be repossessed, it isn't an investment you can just decide to back out of quickly, you will need to sell the property which can take several months

Additional costs - There are a variety of costs that need to be budgeted for when purchasing a house, such as mortgage fees, solicitor fees, upfront fees and stamp duty if applicable. You will also need to budget for any unexpected repair costs.

Paying Rent

Renting a home means you will pay rent to a landlord and this may mean you are paying the landlord's mortgage. Most rental properties have other upfront costs, these include a deposit, which is typically a months deposit and a fee to hold the property while reference checks are being performed, this fee is usually a weeks rent. Typically, this fee will be deducted from your first months rent.

The average monthly rent has increased in recent years along with the cost of living and this has had a massive effect on people renting properties as people's disposable income has reduced.

Advantages of paying rent

Maintenance costs - These types of costs aren't your responsibility as these will fall to your landlord during your rental period, as they own the property, the landlord will sort out any issues from a leak under the sink or a broken shower

Location - Rental properties are all over the city so wherever you are looking for a property, 9 times out of 10 there will be a rental property in your desired area

Flexibility - The majority of rental contracts are between 6-12 months as this gives the landlord time to decide whether or not they would like to keep the tenant in the property. It is easier to move quickly if you need to if you have lost your job for example or if you would like to live in a different area, as long as you give your landlord the required notice

Disadvantages of paying rent

Tenancy agreement - There are certain rules and regulations you have to follow when tied into an agreement with your landlord such as asking for permission to decorate the property or if you own any pets, this has to be discussed with the landlord before you move a pet into the house

Rent increases - Your monthly rental payments can increase upon renewal of your tenancy

Insecurity - When your tenancy agreement comes to an end your landlord may decide not to renew your tenancy or could decide to evict you to take back the property or sell it if they wish to do so, with relatively short notice

Paying your landlord's mortgage - Your rental payments will pay off someone else's mortgage rather than your own, you won't own the property which means your payments won't be going towards your own investment

Should I buy a property or rent one?

Whether you decide to rent or buy you have to weigh up all of your options, pros and cons. There are upfront costs with both renting and if you decide to buy a house, both require a deposit and additional fees are required for both. For example, stamp duty is a big payment that may be needed so make sure you have considered all the costs before committing to purchasing a house.

If you are looking for a mortgage to purchase a property contact us on 0151 662 0188 or email on [email protected]