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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 August 12, 2019

    How To Start a Conversation with Anyone

    How To Start a Conversation with Anyone

    The hardest part of socializing, for many people, is how to start a conversation. However, it is a big mistake to go about life not making the first move and waiting for someone else to do it [in conversation or anything].

    This isn’t to say you must always be the first in everything or initiate a conversation with everyone you see. What should be said, though, is once you get good at starting conversations, a lot of other things will progress in the way you want; such as networking and your love life.

    Benefits of Initiating a Conversation

    First thing is you should acknowledge why it is a good thing to be able to initiate conversations with strangers or people who you don’t know well:

    • You’re not a loner with nothing to do.
    • You look more approachable if you are comfortable approaching others.
    • Meeting new people means developing a network of friends or peers which leads to more knowledge and experiences.

    You can only learn so much alone, and I’m sure you’re aware of the benefits of learning from others. Being able to distinguish the ‘good from bad’ amongst a group of people will help in building a suitable network, or making a fun night.

    All people are good in their own way. Being able to have a good time with anybody is a worthy trait and something to discuss another time. However, if you have a specific purpose while in social situations, you may want to stick with people who are suitable.

    This means distinguishing between people who might suit you and your ‘purpose’ from those who probably won’t. This can require some people-judging, which I am generally very opposed to. However, this does make approaching people all the more easier.

    It helps to motivate the conversation if you really want to know this person. Also, you’ll find your circle of friends and peers grows to something you really like and enjoy.

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    The Rules

    I don’t have many rules in this life, for conversation or anything; but when it comes to approaching strangers, there are a few I’d like used.

    1. Be polite. Within context, don’t be a creepy, arrogant loudmouth or anything. Acknowledge that you are in the company of strangers and don’t make anyone feel uncomfortable. First impressions mean something.
    2. Keep it light. Don’t launch into a heartfelt rant or a story of tragedy. We’re out to have fun.
    3. Don’t be a prude. This just means relax. This isn’t a science and conversation isn’t a fine art. Talk to people like you’re already friends.
    4. Be honest. Be yourself. People can tell.

    Who To Talk To?

    I’m of the ilk that likes to talk to everyone and anyone. Everyone has a story and good personalities. Some are harder to get to than others, but if you’re on a people-finding excursion, like I usually am, then everyone is pretty much fair game.

    That said, if you’re out at a function and you want to build a network of people in your niche, you will want to distinguish those people from the others. Find the ‘leaders’ in a group of people or ask around for what you’re looking for.

    In a more general environment, like at a bar, you will want to do the same sort of thing. Acknowledge what you actually want and try to distinguish suitable people. Once you find someone, or a group of people, that you want to meet and talk to, hop to it.

    Think of a few things you might have in common. What did you notice about their dress sense?

    Building Confidence

    The most important part of initiating conversation is, arguably, having confidence. It should be obvious that without any amount of self-esteem you will struggle. Having confidence in yourself and who you are makes this job very easy.

    If you find yourself doubting your worth, or how interesting you are, make a few mental notes of why you are interesting and worth talking to. There is no question you are. You just have to realize that.

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    What do I do? What is interesting about it? What are my strong points and what are my weak ones? Confident people succeed because they play on their strengths.

    Across the Room Rapport

    This is rapport building without talking. It’s as simple as reciprocated eye contact and smiles etc. Acknowledging someone else’s presence before approaching them goes a long way to making introductions easier. You are instantly no longer just a random person.

    In my other article How Not To Suck At Socializing, there are things you can do to make yourself appear approachable. This doesn’t necessarily mean people are going to flock to you. You’ll still probably need to initiate conversations.

    People notice other people who are having a blast. If you’re that person, someone will acknowledge it and will make the ‘across the room rapport’ building a breeze. If you’re that person that is getting along great with their present company, others will want to talk to you. This will make your approach more comfortable for both parties.

    The Approach

    When it comes to being social, the less analytical and formulaic you are the better. Try not to map out your every move and plan too much. Although we are talking about how to initiate conversation, these are really only tips. When it comes to the approach, though, there are some things you should keep in mind.

    Different situations call for different approaches. Formal situations call for something more formal and relaxed ones should be relaxed.

    At a work function, for instance, be a little formal and introduce yourself. People will want to know who you are and what you do right away. This isn’t to say you should only talk about work, but an introduction and handshake is appropriate.

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    If you’re at a bar, then things are very different and you should be much more open to unstructured introductions. Personally, I don’t like the idea of walking directly to someone to talk to them. It’s too direct. I like the sense of randomness that comes with meeting new people.

    However, if there is rapport already established, go for it. If not, take a wander, buy a drink and be aware of where people are. If there is someone you would like to talk to, make yourself available and not sit all night etc.

    When someone is alone and looks bored, do them a favor and approach them. No matter how bad the conversation might get, they should at least appreciate the company and friendliness.

    Briefly, Approaching Groups

    When integrating with an established group conversation, there is really one thing to know. That is to establish the ‘leader’ and introduce yourself to them. I mentioned that before, but here is how and why.

    The why is the leader of a group conversation is probably the more social and outgoing. They will more readily accept your introduction and then introduce you to the rest of the group. This hierarchy in a group conversation is much more prevalent in formal situations where one person is leading the conversation.

    A group of friends out for the night is much more difficult to crack. This may even be another topic for discussion, but one thing I know that works is initiating conversation with a ‘stray’. It sounds predatorial, but it works.

    More often than not, this occurs without intention. But if you do really want to get into a group of friends, your best bet is approaching one of them while they are away from the group and being invited into the group.

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    It is possible, like everything, to approach a group outright and join them. However, this is almost an art and requires another specific post.

    Topics Of Conversation

    Other than confidence, the next thing people who have trouble initiating conversations lack is conversation! So here are a few tips to get the ball rolling:

    • Small talk sucks. It’s boring and a lot of people already begin to zone out when questions like, “What do you do?” or “What’s with this weather?” come up. Just skip it.
    • Everything is fair game. If you are in the company of someone and a thought strikes you, share it. “This drink is garbage! What are you drinking?” “Where did you get that outfit?”
    • Opinions matter. This is any easy way to hit the ground running in conversation. Everyone has one, and when you share yours, another will reveal itself. The great thing about this line of thought is that you are instantly learning about the other person and what they like, dislike etc.
    • Environment. The place you’re in is full of things to comment on. The DJ, band, fashions; start talking about what you see.
    • Current events. Unless it’s something accessible or light-hearted, forget it. Don’t launch into your opinion on the war or politics. If your town has recently hosted a festival, ask what they think about it.

    Exiting Conversation

    Although I’d like to write a full post on exiting strategies for conversations you don’t want to be in, here are some tips:

    • The first thing is don’t stay in a conversation you’re not interested in. It’ll show and will be no fun for anyone.
    • Be polite and excuse yourself. You’re probably out with friends, go back to them.  Or buy a drink. Most people will probably want to finish the conversation as much as you.

    Likewise, you could start another conversation.

    If you’d like to learn more tips about starting a conversation, this guide maybe useful for you: How to Talk to Strangers Without Feeling Awkward

    Featured photo credit: Priscilla Du Preez via unsplash.com

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