Switch from Renting to Owning23 May 2018
Why switch from renting to owning?
Renting can be a great way to gain your independence. Whether you’re moving out of your family home, or moving to a different area, you can experience what it’s like to fend for yourself, such as managing the household bills, cleaning, cooking etc. However, if you’ve been renting for a while, you might now want to spread your wings, step onto the property ladder and consider buying somewhere you can call your own.
What do you need to know about home ownership?
In all honesty, aside from the financial commitment, there isn’t a huge difference between renting and buying, as you’ll still have to make a monthly payment, but it will be a mortgage payment to your lender rather than a rent payment to your landlord.
The main things to be aware of are:
- Paying the deposit upfront – For many, this is the biggest hurdle when it comes to buying your own house.
- Taxes and insurance – Land & Buildings Transaction Tax may need to be paid some property purchases. Insurances, such as life cover and building and contents will also need to be considered.
- Extra fees, such as surveys and solicitors – Make sure you have enough money left in the pot to cover the costs of surveys and solicitor fees.
- Maintenance costs – In rented accommodation you can fall back on your landlord if you have any maintenance issues, e.g. if the boiler stops working. However, when you own your own home, you are the landlord! Therefore, if anything goes wrong, you need to make sure you can pay to get it fixed, so you’ll need to keep an emergency fund to one side.
Your credit score
Although you would have needed a good credit score in order to rent, there will be further affordability checks that you’ll have to pass before a lender agrees to grant you a mortgage. Speak to an adviser about what improvements you can make if you’re worried about your score.
You’ll often find that it is the unpredictable nature of life events that can push you from renting to buying. Perhaps your landlord is deciding to sell the property, perhaps you’re having a baby and need somewhere with more space, or perhaps you want to move to the next stage in your relationship and live with your partner.
One thing that’s for sure when buying a house is the long-term commitment that it requires. For many, a mortgage will be the largest financial commitment you ever make so you need to make sure that you’re absolutely ready and know how much you can borrow. However, it’s not just the financial commitment you need to be sure about. You need to be ready to settle down in one area and know that this is the right decision for you.
Mortgage Advice Bureau
We’re here to help get you started on the journey to owning your own home. If you’re feeling unsure where to start then please contact us today and one of our specialist advisers can answer any questions you may have:
Call 0800 652 6649
Your home may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.