Updated 03 September 2020
Homeowners overestimate the amount of time it will take them to buy their second home. In reality we’re able to buy a second home a lot quicker than most of us think.
Despite recent reports that second-time buyers think it could take up to 14 years until they can afford their second home, in actuality it seems that we are being needlessly pessimistic estimating how long it’ll take to step up onto the second rung of the ladder.
“We’re being unnecessarily gloomy when it comes to these estimations and it actually takes just six years for the average first-time buyer to be able to afford their new home”
A report by the Post Office found that although the average age to buy a first home was 28 years old, these homeowners think they’d be able to move on to their second property until the age of 42. That’s a wait of 14 years to buy their next pad.
But in reality, this is not the case. Moneywise reported last week that we are being unnecessarily gloomy when it comes to these estimations and it actually takes just six years for the average first-time buyer to be able to afford that next step.
So, how do you become a “second stepper”?
Consider government schemes Such as the government’s ‘help to buy’ scheme. The scheme is available to new and existing home owners but only on new builds costing up to £600,000. You’ll need to contribute at least 5 per cent of the property price as a deposit but the government could give you a loan for up to 20 per cent of the total house cost.
Start saving now A financial adviser can help you delve into your finances to help you make the most of your savings and salary.
Get the right mortgage advice With interest rates still relatively low, and lenders being more cautious than in previous years, you could get a much better mortgage deal with the help of a qualified and experienced mortgage adviser. Your mortgage adviser can guide you through the process of finding the right mortgage, tailored to your income and credit rating. They’ll help you work out how much you can afford each month in repayments and be able to advise you on whether a repayment mortgage or an interest-only loan with a separate capital repayment vehicle is better for you.
Is it time to start planning your next step? Seeking mortgage advice and checking out your options may help you to start the next phase of your housing journey sooner than you you think.