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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 October 30, 2018

    How to Motivate Yourself: 13 Simple Ways You Can Try Right Now

    How to Motivate Yourself: 13 Simple Ways You Can Try Right Now

    Who needs Tony Robbins when you can motivate yourself? Overcoming the emotional hurdle to get stuff done when you’d rather sit on the couch isn’t always easy. But unless calling in sick and waking up at noon have no consequences for you, it’s often a must.

    For those of you who never procrastinate, distract yourself or drag your feet when you should be doing something important, well done so far! But for the rest of you, it’s good to have a library of motivational boosters to move along.

    Whether you’re starting a buisiness, trying to los weight or breaking a bad habit, you’ll learn how to motivate yourself with different techniques in this article.

    13 Simple Ways to Motivate Yourself Right Now

    Despite your best efforts, passion, habits and a flow-producing environment can fail. In that case, it’s time to find whatever emotional pump-up you can use to get started:

    1. Go back to “why”

    Focusing on a dull task doesn’t make it any more attractive. Zooming out and asking yourself why you are bothering in the first place will make it more appealing.

    If you can’t figure out why, then there’s a good chance you shouldn’t bother with it in the first place.

    2. Go for five

    Start working for five minutes. Often that little push will be enough to get you going.

    3. Move around

    Get your body moving as you would if you were extremely motivated to do something. This ‘faking it’ approach to motivation may seem silly or crude but it works.

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    4. Find the next step

    If it seems impossible to work on a project for you, you can try to focus on the next immediate step.

    Fighting an amorphous blob of work will only cause procrastination. Chunk it up so that it becomes manageable. Learn how to stop procrastinating in this guide.

    5. Find your itch

    What is keeping you from working? Don’t let the itch continue without isolating it and removing the problem.

    Are you unmotivated because you feel overwhelmed, tired, afraid, bored, restless or angry? Maybe it is because you aren’t sure you have time or delegated tasks haven’t been finished yet?

    6. Deconstruct your fears

    I’m sure you don’t have a phobia about getting stuff done. But at the same time, hidden fears or anxieties can keep you from getting real work completed.

    Isolate the unknowns and make yourself confident, you can handle the worst case scenario.

    7. Get a partner

    Find someone who will motivate you when you’re feeling lazy. I have a friend I go to the gym with. Besides spotting weight, having a friend can help motivate you to work hard when you’d normally quit.

    8. Kickstart your day

    Plan out tomorrow. Get up early and place all the important things early in the morning. Building momentum early in the day can usually carry you forward far later.

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    Having a morning routine is a good idea for you to stay motivated!

    9. Read books

    Read not just self-help or motivational books but any book that has new ideas. New ideas get your mental gears turning and can build motivation. Here’re more reasons to read every day.

    Learning new ideas puts your brain in motion so it requires less time to speed up to your tasks.

    10. Get the right tools

    Your environment can have a profound effect on your enthusiasm. Computers that are too slow, inefficient applications or a vehicle that breaks down constantly can kill your motivation.

    Building motivation is almost as important as avoiding the traps that can stop it.

    11. Be careful with the small problems

    The worst killer of motivation is facing a seemingly small problem that creates endless frustration.

    Reframe little problems that must be fixed as bigger ones or they will kill any drive you have.

    12. Develop a mantra

    Find a few statements that focus your mind and motivate you. It doesn’t matter whether they are pulled from a tacky motivational poster or just a few words to tell you what to do.

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    If you aren’t sure where to start, a good personal mantra is “Do it now!” You can find more here too: 7 Empowering Affirmations That Will Help You Be Mentally Strong

    13. Build on success

    Success creates success. When you’ve just won, it is easy to feel motivated about almost anything. Emotions tend not to be situation specific, so a small win, whether it is a compliment from a colleague or finishing two thirds of your tasks before noon can turn you into a juggernaut.

    There are many ways you can place small successes earlier on to spur motivation later. Structuring your to-do lists, placing straightforward tasks such as exercising early in the day or giving yourself an affirmation can do the trick.

    How to Stay Motivated Forever (Without Motivation Tricks)

    The best way to motivate yourself is to organize your life so you don’t have to. If work is a constant battle for you, perhaps it is time to start thinking about a new job. The idea is that explicit motivational techniques should be a backup, not your regular routine.

    Here are some other things to consider making work flow more naturally:

    Passion

    Do things you have a passion for. We all have to do things we don’t want to. But if life has become a chronic source of dull chores, you’ve got a big problem that needs fixing.

    Not sure what your passion is to get you motivated? This will help you:

    How to Get Motivated and Be Happy Every Day When You Wake Up

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    Habits

    You can’t put everything on autopilot. I’ve found putting a few core habits in place creates a structure for the day.

    Waking up at the same time, working at the same times and having a similar productive routine makes it easier to do the next day.

    This guide will be useful for you if you’re looking to build good habits:

    Understand Your Habits to Control Them 100%

    Flow

    Flow is the state where your mind is completely focused on the task at hand. While there are many factors that go into producing this state, having the right challenge level is a big part.

    Find ways to tweak your tasks so they hover in that sweet spot between boredom and maddening frustration.

    Easily distracted and hard to focus? Here’s your solution.

    Final Thoughts

    With all these tips I’ve shared with you, now you know what to do when you’re feeling unmotivated.

    Find your passion and develop a positive mantra so when the next time negativity hits you again, you know how to stay positive and motivated!

    Featured photo credit: Pexels via pexels.com

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