Buy Netflix and Join the Caravan Club: How to Buy a House When You're Bald
FEBRUARY is the best month to sell a house, new research shows.
But can cash-strapped people in Britain actually afford to buy one?
5
Yes, says financial expert Gemma Bird, aka Money Mum, who bought three houses on a £25,000 salary and paid off her mortgage before she turned 40.
The money-saving influencer and mother of two says: “Whether you have a tenner or ten grand, everyone deserves to have their own home.
“You just need the right tips and tricks to build your bank account and buy what you can afford.
“I can help you there.”
From caravans to cutting ties with your ex, Gemma shares her best advice for getting a foot on the property ladder – even if you're skinny.
GET THE CRUNCH ON CREDIT SCORES
5
DELETE YOUR EX: Have you split up with your significant other? Make sure you cut ties with their money as well.
“Don't let your ex's money problems affect your credit history,” says Gemma.
“Remove yourself from joint bank accounts, pay off any joint loans and contact credit reporting agencies – TransUnion, Equifax and Experian – for a 'notice of withdrawal'.
“It removes your name from any individual debt they have and keeps your credit score squeaky clean.”
TRIPLE CHECK YOUR ADDRESS: Did you live in more than one rental property?
Make sure your address is correct on all your invoices and subscriptions.
“You may have an old bank card that you don't use and it's still registered to an old address – and that's bad news for your credit rating,” says Gemma.
“If it seems like you live in different places, lenders may think you are having trouble paying rent and your score will drop.”
REGISTER TO VOTE: Have you registered to cast your vote? If not, you are just a hair's breadth away from being denied a mortgage.
“If you're not on the electoral roll, lenders may have difficulty verifying your identity,” says Gemma.
“People have had their mortgages rejected because of this, so make sure you apply now or you will find yourself in a difficult situation with your lender.”
DELETE YOUR JOINT ACCOUNT: If you're buying something with a friend or family member, or your partner, keep your money separate, especially if they have debt.
Gemma says: “If you share a bank account and one of you owes money, you both have bad credit.
“It can take months for things to get better again, so if you have doubts about your partner's finances, take care of your own finances.”
PAY THE INSURANCE IN FULL: Paying off your insurance bills every month (car or home contents, for example) instead of paying the full cost at once will negatively impact your credit score.
Gemma says: “It's always worth paying for insurance upfront if possible, to make you more attractive to lenders.
“In addition, some providers charge more if you pay in installments, which means your piggy bank does not grow.”
PAY ATTENTION TO YOUR MORTGAGE
GET A SWEET DEAL: Choosing the best mortgage is a minefield for first-time buyers, so don't choose one too quickly.
“Shop around instead of choosing the first mortgage you come across,” says Gemma.
“For around £200, a good broker will scour the market for the best deal and provide advice on fixed rate, variable rate and interest-only loans.
“Talk to your bank – if you're a loyal customer there might be a great deal for you – and don't discount smaller lenders who may have lower interest rates and fewer fees.
“Avoid repeatedly applying for mortgages if you're turned down – your credit rating will take a real kick.”
PUT THOSE BABY PLANS ON HOLD: Trying to have a baby or change jobs can be exciting, but it's not attractive to banks.
Stay “safe” in the eyes of your lender until the deal is finalized.
Gemma says: “If you are self-employed, have less than six months of employment or are having a baby, lenders tend to zip up their wallets.
“In their eyes, you could run out of money and not pay your mortgage, and that's a huge red flag.
“Leave the big changes in life until your home is yours.”
5
GET A NETFLIX SUBSCRIPTION: Paying for Netflix or Disney+ subscriptions? You are in the good books of one bank.
“First-time buyers can now use direct debits for streaming services as proof that they can afford a mortgage,” says Gemma.
“Leeds Building Society accepts them and more banks could follow suit in the future – provided you have paid for your services on time.”
BUY WITH A BUDDY: Not everyone buys a house with their better half.
Investing in stones with a friend or family member is much cheaper than investing alone.
Gemma says: “I got my first mortgage from my father and split the profits 50/50 when we sold.
“If you invest with someone you trust, you can save huge amounts of money.
“But remember: relationships can deteriorate. Ask your lawyer to draw up a contract so you don't end up out of pocket if the worst happens.”
CHOOSING PROPERTY
5
DO NOT LOOK AT BRICK AND MORTAR: Think outside the box: not everyone lives in a brick house. Different materials can mean a better price.
Gemma says: “You may turn your nose up, but a static caravan is still a home and in the right areas, such as Devon and Dorset, they can increase in value.
“It's easier to get a deal on a caravan worth £70,000 than it is on a house worth £300,000.
“You have to pay a site fee, such as the ground rent for a flat, but your loan should be much lower.”
BUY FOR A BARGAIN: Be realistic about where you want to live.
A penthouse in central London is a dream, but a cute two-bedroom cottage outside the capital could tick all the boxes.
“Burnley, Aberdeen, County Durham and Hartlepool are some of the most affordable places to buy in Britain, with the average house costing £115,000 to £120,000,” says Gemma.
“Buy within your means, not according to your burning desires.”
KEEP AN EYE ON UNBELOVED HOMES: We're all drawn to luxurious, expensive properties, but a low budget means the bar is lowered.
Gemma says: “Ask local estate agents to send you a list of all their recently completed properties.
“Also keep an eye on the houses that are on the market. If the seller is eager to sell, they may lower the price for you.
SAVE IN A SMART WAY
Get ready to double your money: You don't have to skip saving. If you have a universal tax credit or a working tax credit, you can use the Help To Save scheme.
“If you claim these credits and earn £722.45 or more per month, you can apply,” says Gemma.
“Save up to £50 a month and you'll get a 50p bonus for every £1 you save up to £1,200 over four years.
“You don't have to pay money every month and at the end of the four-year period your money could double to £2,400.”
BE A CAR SAVER: Forgetful people (and shopaholics) can build up huge savings without even noticing, and it's all thanks to AI.
Gemma says: “Automatic savings apps like Plum and Chip use AI software to track your spending habits so you never run out of money.
“The apps collect a few euros a day with options such as rounding up to the nearest pound. Interest rates vary, so shop around for the best deal.”
MAKE AN OFFER: Whether it's your favorite Chinese takeaway or your daily coffee fix, you'll have to sacrifice one of your regular treats when saving for a house.
“That £4 Starbucks latte may seem like a drop in the ocean, but if you make your own coffee five times a week you will save almost £100 a month,” says Gemma.
“Little things like this go a long way. Put the money in a savings account so you don't spend it elsewhere.”