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7 Tips to Get on the Property Ladder

7 Tips to Get on the Property Ladder
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    Despite the much publicised problems in the US Housing Market, there are still many long term advantages to buying a house in preference to renting.

    Buying a house has historically been a good investment; since 1945, house prices have increased faster than inflation and have also outperformed the stock market. Also, buying a house gives you the opportunity to live rent free when you have paid off the mortgage. Mortgages do fluctuate with interest rates. However, generally, mortgages become easier to pay over time. If your mortgage payments are currently $800 a month, this may seem alot, but if you income rises, then as a % of income, your mortgage will eventually fall.

    Despite the financial benefits, buying your first house can prove difficult because of the high prices we currently face.

    These are some tips for buying your first house.

    1. Save a deposit.

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    As soon as possible try to put money aside for a deposit. If you have a good sized deposit, mortgage lenders have more confidence in lending bigger amounts of money. This is because you are less likely to suffer from negative equity. The problem is that to save a decent % of a house can take many years of careful saving. However, with house prices currently stagnant, it has become a little easier.

    2. Borrow From Parents.

    Depending on your circumstances, this may be an option. There are several drawbacks to this approach. But, for many it provides the only realistic hope of getting on the property ladder. Parents may be able to release equity from the value of their house and lend you money (hopefully for a very low interest) this can provide the necessary deposit to buy your house. Many parents are willing to do this because they realise that their generation has benefited significantly from rising house prices. In extreme circumstances parents may be willing to act as a guarantor for your mortgage.

    3. Joint Mortgage.

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    It is becoming increasingly popular for young single people to combine their incomes with others so that they can afford a mortgage. Their own salary is insufficient. But, by buying with other people you effectively double your income, and this can enable you to buy a house. However, there are drawbacks. Firstly, you only will only own a 50% share in the house. Secondly, if you fall out with the other person, it can create an awkward situation, both financially and domestically.

    4. Interest Only Mortgage.

    This means you only pay interest on your mortgage loan. This means it is a cheaper repayment. However, there is a big disadvantage. At the end of the 30 year period, you still owe the entire mortgage loan. Interest only mortgages will only work if you can find an alternative way to invest in paying off the debt.

    5. 50 Year Mortgage.

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    A 50 year mortgage means that you spread repayments over 50 years rather than the standard 25 years. It means that monthly payments will be lower than a 25 year mortgage. The drawback is that you end up paying more interest payments over the course of the mortgage. However, it is likely to still be a better option than renting. Also, if you income increases in the future, you can always reduce the mortgage term at a later date.

    6. Move to a Cheaper Area.

    House prices in some areas are much cheaper. If you are willing to move to these areas then you can make buying a house a real possibility. Maybe in the future you can move back to more desirable areas. It is worth bearing in mind that cheaper areas do not always mean lower quality. For example, some areas have a premium because they are close to good schools. It is worth researching carefully average house prices in different areas.

    7. Self Certification Mortgage.

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    If you feel frustrated that banks won’t lend more than 3-4 times your income you might like to consider a self certification mortgage. Basically, a self certification mortgage enables you to state your likely income. In practise this can be a way to borrow more than under standard circumstances. Given the recent problems with sub prime mortgages it is advisable to be cautious when proceeding with this option. I mention it mainly because it is what I used to buy my first house, 3 years ago. Buying a house was a little more expensive than renting. But, self certificating was the only option to borrow enough capital. Do bear in mind, if you borrow a high income multiple (5 or 6 times income) you will struggle if interest rates rise significantly.

    Getting on the property ladder is not easy for our generation. It is likely you will have to make some sort of sacrifices. However, the alternative of renting is often even more unattractive. Which ever option you choose make sure you don’t go beyond your financial limitations.

    Tejvan Pettinger works as an Economics teacher in Oxford. He writes a blog about Mortgages and Finance. This Includes articles about the Housing Market, getting out of debt and paying off your mortgage early

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    Last Updated on May 14, 2019

    8 Replacements for Google Notebook

    8 Replacements for Google Notebook

    Exploring alternatives to Google Notebook? There are more than a few ‘notebooks’ available online these days, although choosing the right one will likely depend on just what you use Google Notebook for.

    1. Zoho Notebook
      If you want to stick with something as close to Google Notebook as possible, Zoho Notebook may just be your best bet. The user interface has some significant changes, but in general, Zoho Notebook has pretty similar features. There is even a Firefox plugin that allows you to highlight content and drop it into your Notebook. You can go a bit further, though, dropping in any spreadsheets or documents you have in Zoho, as well as some applications and all websites — to the point that you can control a desktop remotely if you pare it with something like Zoho Meeting.
    2. Evernote
      The features that Evernote brings to the table are pretty great. In addition to allowing you to capture parts of a website, Evernote has a desktop search tool mobil versions (iPhone and Windows Mobile). It even has an API, if you’ve got any features in mind not currently available. Evernote offers 40 MB for free accounts — if you’ll need more, the premium version is priced at $5 per month or $45 per year. Encryption, size and whether you’ll see ads seem to be the main differences between the free and premium versions.
    3. Net Notes
      If the major allure for Google Notebooks lays in the Firefox extension, Net Notes might be a good alternative. It’s a Firefox extension that allows you to save notes on websites in your bookmarks. You can toggle the Net Notes sidebar and access your notes as you browse. You can also tag websites. Net Notes works with Mozilla Weave if you need to access your notes from multiple computers.
    4. i-Lighter
      You can highlight and save information from any website while you’re browsing with i-Lighter. You can also add notes to your i-Lighted information, as well as email it or send the information to be posted to your blog or Twitter account. Your notes are saved in a notebook on your computer — but they’re also synchronized to the iLighter website. You can log in to the site from any computer.
    5. Clipmarks
      For those browsers interested in sharing what they find with others, Clipmarks provides a tool to select clips of text, images and video and share them with friends. You can easily syndicate your finds to a whole list of sites such as Facebook, Twitter and Digg. You can also easily review your past clips and use them as references through Clipmarks’ website.
    6. UberNote
      If you can think of a way to send notes to UberNote, it can handle it. You can clip material while browsing, email, IM, text message or even visit the UberNote sites to add notes to the information you have saved. You can organize your notes, tag them and even add checkboxes if you want to turn a note into some sort of task list. You can drag and drop information between notes in order to manage them.
    7. iLeonardo
      iLeonardo treats research as a social concern. You can create a notebook on iLeonardo on a particular topic, collecting information online. You can also access other people’s notebooks. It may not necessarily take the place of Google Notebook — I’m pretty sure my notes on some subjects are cryptic — but it’s a pretty cool tool. You can keep notebooks private if you like the interface but don’t want to share a particular project. iLeonardo does allow you to follow fellow notetakers and receive the information they find on a particular topic.
    8. Zotero
      Another Firefox extension, Zotero started life as a citation management tool targeted towards academic researchers. However, it offers notetaking tools, as well as a way to save files to your notebook. If you do a lot of writing in Microsoft Word or Open Office, Zotero might be the tool for you — it’s integrated with both word processing software to allow you to easily move your notes over, as well as several blogging options. Zotero’s interface is also available in more than 30 languages.

    I’ve been relying on Google Notebook as a catch-all for blog post ideas — being able to just highlight information and save it is a great tool for a blogger.

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    In replacing it, though, I’m starting to lean towards Evernote. I’ve found it handles pretty much everything I want, especially with the voice recording feature. I’m planning to keep trying things out for a while yet — I’m sticking with Google Notebook until the Firefox extension quits working — and if you have any recommendations that I missed when I put together this list, I’d love to hear them — just leave a comment!

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