Selling a home to first-time buyers is one of the great pleasures of my job as a local real estate agent. You help to send them on their way into a new and exciting life with a property that they can finally call their own.
Of course, homeownership comes with responsibilities, not least of which is paying a mortgage and managing cash flow. While life is no cake-walk, knowing you’ve invested in property and your future sure does ease matters.
For those who have just bought a property, or are thinking of entering the market for the first time, it’s good to form a strategy to manage money in this new chapter of your life.
I always recommend that anyone with financial concerns see a professional adviser or consult their mortgage broker. But below is a short-list of ideas and opportunities to help you on your way.
- Be disciplined with money – I don’t mean you should save, or resist buying the expensive pair of shoes or trainers that you’ve had your eye on. Instead, be diligent about which types of accounts you use to bank your money. Seek out high-interest bearing accounts. Sometimes these won’t offer instant access to cash, so think carefully about your weekly or monthly budget. Interest rates are low at the moment, but this is a discipline that will serve you across an entire lifetime.
- Use a mortgage broker – When borrowing for a home for the first time, the number and scope of bank loans can be bewildering. Mortgage brokers will help make sense of everything for you. They have an array of products from which to choose. They’ll explain each one, guide you on your spending limit and help you make a loan application.
- Pay off your principal – You do this by paying a little extra on your mortgage each month. Even though money is cheap right now, you’ll still take years off your mortgage schedule by zapping the principal. Smaller principals mean you pay less interest. So, this strategy creates a virtuous, continuous circle until the debt is gone.
- Be frugal with furnishings – The cost of furnishing a new home can get out of control. Take a two-pronged approach by selling your existing furniture and upgrading on a strict budget. You’ll always find great deals online and some real treasures on second-hand sites or preloved furniture from family.
- Home improvements – When you buy your first home, there’ll always be a few jobs that will need doing. If you’re not a DIY expert, then focus on hiring quality contractors. Avoid cash-in-hand operators. Nothing wastes cash more than shoddy workmanship by unlicensed contractors. There are plenty of opportunities to save money, but not here. Get the job done right the first time.