Seeing and hearing of double-digit rises in house prices and the seemingly never ending streak of them forced by estate agents ramping up interest with open days and sealed bids, it is little wonder some first time buyers are panicking. Some agents have reported properties attracting hundreds of viewings and regularly going for £50,000 more than the asking price.
So how can you keep it together when all other buyers are loosing it? Here are 3 things to consider before you rush to buy:
What are your plans for the future?
Buy while think further down the line. It is of no point to buy a studio if you are planning to start a family soon, the burden of reselling and remortgaging your flat might just not be worth. Also consider your own financial situation, are you ready to buy a flat? Is your career something you see yourself doing longterm? If you buy the wrong place while you yourself are in the wrong place, you could find yourself selling at a loss.
Think of interest rates
We have now all become accustomed to interest rates at record lows, this has been going on for 7years now which is an eternity in property years. Do not kid yourself, interest rates can and will only rise from here so be prepared. Don’t borrow more than you can chew and always make sure you are earning enough to be able to cover certain limits on interest rate rises.
What will your finances look like after you’ve bought?
Before you overstretch yourself to place the winning bid on a property – especially if you are going in with a high loan-to-value mortgage – first assess the long-term impact of the sacrifices you will have to make. Are you truly ready for the commitment of such a large mortgage? Have you fully factored in the other additional costs, e.g. legal fees, stamp duty? What if house prices fall and you end up in negative equity? You will be stuck there, unable to sell?