British Asia News Network
The 20-Something’s Guide to Getting a Mortgage
It’s daunting, being in your twenties. Not knowing exactly what the future holds; the excitement of your youth and all the freedom to match, but facing the rigmarole of work life, the pressure of paying rent, and questioning your happiness. Oh, and the thought of buying a house, saving for a wedding and starting a family – those all feel like distant milestones. Well, fear not, that’s what we are here for, to point you in the right direction for saving for that first house, be it a buy to let or a home. Here it goes…
Save, save and save
Yes, the classic ‘save, don’t spend’. I know, we’ve only just started and you already want to close this article, but hear us out…
When you get a mortgage, you’ll need a deposit for the property you are looking to purchase. The deposit, on average is made up of 25% of the property price and well, houses aren’t cheap. Even by saving 10-20% of your monthly salary, it’ll accumulate quicker than you realise. Set up a standing order for a day or so after payday, that way you won’t even notice the money come in and out, and by the time you know it, the pennies will have turned into pounds, serious pounds.
Uh oh, the taboo of the credit card, and here we are advocating it. Getting yourself a credit card will actually help you a lot. If you’re a first-time buyer, which most millennials will be, you won’t have a credit history for mortgage lenders to go by when assessing whether you are able to make monthly mortgage payments. By having, and using a credit card, this will help to do this, also building your credit rating. Just make sure to pay the credit off every month!
When saving to buy a house, the deposit usually makes up a significant sum. A seriously viable option in saving for a deposit is, the side hustle - well, at least I think that’s what the kids call it these days! Fifty-percent of millennials have a side venture alongside their full-time income. By having a secondary income – you’re doing something you’re passionate about, and you also have multiple income streams, putting you in a better position to save more. You may also get an increased mortgage if your side hustle is a part-time job.
Pick up a side hustle doing something you love and you’ll finally be thanking your parents for all those extracurricular activities they set up for you when it’s raking you in the pounds, who knows it could soon turn into a primary income.
Finally, don’t stress. This is just an all-round word of advice, you may think everyone around you has got it sorted; with great jobs, and a great life. But in your 20s most people are still figuring it out. Just budget, stay consistent and save – it will get you ahead of the curve quicker than you think.