Basic Finance Care Finance tips
If you are on the property ladder, looking to get on to it in the near future or are a property developer, then having a little insight into the property market is helpful for ensuring you make sound investments. Here are 6 finance tips for the property market that may prove useful.
Borrow responsibly
For many, property purchase or development means borrowing. Whether you require a loan, a mortgage, or a finance package of some variety it is always best to practice responsible borrowing. Recent statistics have shown that the approval for lending has significantly increased in recent months. This is positive news for property investors. However, as with all borrowing, it may be tempting to seek more funding than you actually require. This will inevitably affect your repayment terms and result in paying back a greater amount of interest.
Shop around
It is good practice to shop around when funding property, lenders will offer numerous different terms and interest rates depending on the amount you want to borrow and how long you want to take to pay it back. An advisor can help you to work out the optimum arrangement for you in line with your budget. Look at the APR’s and repayment terms available and select the one that is most cost-effective for your means. There may even be schemes available to help you make your purchase.
Remember to account for other expenses
Be mindful of other expenses that may be incurred when purchasing property too. Stamp Duty, surveyance, administrative costs, refurbishment and maintenance costs, and any fees incurred from your lender, such as late or early repayment fees. These extra costs may quickly rack up into the thousands so you shouldn’t overlook them; factor them into your budget calculations so that you don’t find that your funds aren’t stretching as far as you had anticipated.
Government schemes
The government have launched various help to buy schemes to assist people, first time buyers in particular, on to the property ladder. Part buy, part let schemes allow buyers to purchase a percentage of a property and let out the remained for significantly reduced rental terms. This may be useful for those unable to save a large enough deposit, and they can then save in order to purchase the remainder of the property at a later date. See what government schemes are available to help get you climbing the ladder.
Don’t miss out on opportunities
The property market is a competitive and fast moving one. The purchase process can take time, and so you don’t want to miss an opportunity because your finances prevented you from taking action. Residential bridge loans can help provide financial fluidity in order to secure your next project ahead of completion, for example. It is a short-term loan designed to free up funds for a property purchase which is then paid off once your existing property has sold. This allows you to act quickly and reduces the chances of you missing out.
Know the market
Acting quickly can come with its own pitfalls if you have not done your market research. There is plenty of data available online to offer guidance on house prices and rent patterns for example, and the market will vary drastically from area to area. You are ultimately seeking a return on your investment either in the short term or for the future, and purchasing the wrong property in the wrong place at the wrong time can scupper a significant return.
Keeping up to date with market news can be a useful tool in guiding you in your investment decisions. Mortgage and re-mortgage acceptance have seen their most significant improvements since the financial crash and even credit card spending has seen notable increases in recent months. This could be indicative of a significant improvement in the market for investors. This kind of insight can allow investors to stay ahead of the game and make purchases at the right moment for optimum ROI.
