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Friday, April 3, 2020

To buy a house without a deposit, live off one income, look for a cheaper property, find an investor, use personal loans, dual occupancy and rent as your deposit.

The most common way to own a house is a mortgage. However, it is possible only when you have enough money to pay down as a deposit. Every mortgage lender would want you to turn in at least 5% of the value of the property as a deposit. It may seem more manageable, but it is not so. Most of the people struggle to arrange a deposit to buy a house.

You may think that you cannot get on the property ladder without paying down a deposit size. Many people put up a question “Can I get a mortgage without a deposit?” to a mortgage broker.
Well, you do not need to worry if you do not have enough savings to buy your dream house. Here are some of the ways how you can invest in a property without arranging a deposit.

Live off one income

It is not surprising that you fail to arrange enough cash to pay down as a deposit.Although you need to pay down as minimum as 5% of the value of your property, it can be quite hard to have this much money set aside while the cost of living is soaring and unexpected expenses are always chasing you.
If you and your partner are earning a decent income, you should start living off a single income for a couple of years by cutting back on your expenses. That household income you can use to meet the shortfall in your savings. Try to keep your lifestyle simple so that you do not have to dip into that money.

There is no denying that living simpler is much easier said than done. If possible, you should shift to your parents’ house. By this way, you can save your money on rent. Other options include skipping vacations, spending less on entertainment, and using a car very often.

Look for a cheaper property

If you do not have enough money to pay down as a deposit for your house, you can look for a more affordable property. It is not set in stone that you will invest in a property worth a million dollar. In the centre of the city, you will likely buy more expensive property than the area a few miles away. You do not need to go outskirts, but a few miles away from the city centre can make a significant difference.

By switching to a cheaper property, you can lower down the size of the deposit, and hence you will not have any difficulty getting your mortgages signed off on from a lender. You do not need to get disappointed about this. Just think that it is your investment for buying a dream home. Further, be careful of the space. If you need space for two households, you do not need to buy a large flat. It will just add burden to your pocket.

Find an investor

Another best way to take out a mortgage when you have a little deposit is finding an investor. You can combine your deposits with the investor to buy a property you like. Buying a property through a joint venture can help you get rid of the headache of deposit, but the full loan will be in your name even though you own half of the property. Make sure that you will not struggle in making repayments. Talk to your online mortgage broker in Manchester like Shinemortgages.co.uk to understand how it works.

Consider dual occupancy

Sometimes a down payment is not the issue but the serviceability of the mortgage. Sometimes the amount is so significant that it becomes hard to keep up with repayments. In this situation, you can consider dual occupancy. It will help you with what is holding you back from repaying your loan. Dual occupancy can allow you to rent out a portion that contributes to your income, making repayments more manageable.

Use personal loansPersonal loans can be an option when you have no deposit. However, you have to make sure that you will be able to manage its repayments along with the mortgage repayments. Sometimes mortgage lenders doubt your repaying capacity if you fund a deposit with personal loans. Therefore, you should apply for it with the help of a mortgage broker.

Pay rent toward your deposit

Thankfully, some lender may allow you to combine your deposit with what you have been paying toward rent. If you have been paying rent every month on time, the lender will likely use your rent as part of your deposit. Ask your mortgage broker about all terms and conditions.
If you have a little deposit, you can use any of the method mentioned above. However, there is no guarantee that you will meet the criteria. Therefore, it is suggested to have enough deposit to take out a mortgage.

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