With the rental market booming and private rental prices in London increasing by around 5% annually, you might be wondering how to convert from a tenant into a homeowner.
Whether you’re interested in buying the house you currently rent or just want to get on the property ladder whilst house prices fall, buying your own home is achievable if you know how. But that doesn’t mean it’s easy – after all, to make the jump you’ll need to save, get a mortgage, and find a house you like.
To help you on your journey, we’ve put together some top tips below.
How to make the jump from tenant to homeowner
- Improve your credit score
To be an appealing prospect for a mortgage lender, you’ll need a solid credit history. If your credit score leaves much to be desired, you should consider ways of bettering it. A better credit score will improve the different options available, so it’s well worth doing if you haven’t already.
By improving your credit score, you’ll get far more choice when it comes to the different mortgages and rates available.
- Consider other options
There are other ways to go if you’d like to avoid the booming rental markets. For example, you might want to consider a shared ownership scheme offered by the Government. This is where you buy a set percentage of the property and then pay rent on the remainder of the house to a housing association.
The main benefit of this route is that it’s often more achievable than a rental. As you’re only buying part of the house, your mortgage is smaller, meaning you might be more likely to be approved for a mortgage. If your credit score is good, that is!
- Save, save, save
If you’re considering buying your own home, you’ve probably thought about saving for a deposit. But equally as important is covering the additional costs associated with home ownership. For example:
- The valuation fee
- Legal costs
- Stamp duty
- Survey costs
- Keep a contingency
No matter your circumstances, it’s always a good idea to keep adding to a contingency (or emergency) fund. This means that you’ll always have enough money for those little extras that you might’ve forgotten about. For example, basic furniture and appliances.
Unless you’re planning to live on a mattress on the floor!
Final thoughts…
Although making the jump from tenant to homeowner is daunting, it’s perfectly achievable with the right know-how. But before you do take the plunge, be sure that it’s the right decision for you and your future.