Don’t let Home Buying Be a Life Time Financial Crisis- Recover Fast
Buying own house in the UK is the biggest and common dream of everyone living in rental apartments. Some people need it for the self use, while some take it as an opportunity to earn profit by reselling. Investing in real estate is still a promising area. According to Nationwide, the average house price increased by 2.1% to £216,103 in Q3 2018. Yorkshire and Humberside witnessed the highest house price rise @ 5.8% during the year to Q3 2018. Therefore, whether you invest to buy a home for the self or for selling it, you need to invest all your saving until now; even then, you need to take installments loan also. Repayment is a long-term liability but many people stretch the repayment period much longer to feel it like a life time financial crisis. Don’t let it happen to you; there are many ways to recover fast from the after effects of buying a property in the UK.
Don’t Use All The Saving For Home Buying:
Using all the saving to buy a home is also not a good approach; you must have cushion to manage the financial emergency that may appear any time. If you delay any monthly installment because of any temporary reason, it draws heavy penalty as well as bad mark on your credit report. Uncertainties in Brexit deal also clouds the certainty in your regular saving. Therefore, before buying a home, assess the accurate down payment, you can afford easily without letting the financial emergency become a long-term financial crisis, and, assess the affordability of monthly repayment amount. People tend to maximize home loan repayment term but don’t follow this practice; plan to live a debt free life earlier in your new home. The following table may help you assess the real down payment amount because numbers of real estate agents don’t show you real picture to finalize the deal in hurry:
|
Why You Need More Saving After Buying Your Home?
The outstanding residential debts increased up to £1,417.2 billion in Q2 2018; it is 3.8% higher than the figure in Q2 2017. The total worth of agreement renewal was £73.2billion with 19.8% hike since Q1 2018. It means more home buyers are facing problem in debt repayment. What is the solution? Saving is the answer but you need more saving than before now. Why?
- Ever increasing living cost
- Increased tax paying liability
- New house furnishing
- New house renovation
- Possible relocation and increased monthly expenses
- Additional debt repayment per month
How to Recover Financially Fast After Buying Your Home?
- Build the emergency fund : The financial advisers suggest for having at least 3 to 5 months of monthly earning in saving account to face financial emergency. In case you don’t get your payment on the time, you can make must to do payments without fail.
- Pay off multiple small obligations to lessen your burden – Scattered obligations create more mess, why not pay off the small ones altogether? Missing repayments of any one of them may push you in poor credit situation. If you already have entered in the danger zone, it is time to rush. Either use your savings or take a short-term loan on cheaper rate, for instance personal loan for bad credit These are available online on instant approval decision on flexible repayment plans.
- Buy adequate life insurance: Little investment for adequate life insurance ensures that your spouse or children wouldn’t lose the home in case of your death; insurer will pay the balance debt.
- Create the monthly budget: Having perfectly planned monthly budget and following it help you save more for diverse heads. Home buying brings significant changes to your financial situation because of additional liabilities and natural expenses; therefore, you must revise your budget for essential and optional expenditure.
- Increase your saving with extra earning: You might get cash gift, annual bonus, incentive for achieving sales target, cash by selling the garbage at home. Don’t spend this extra money; instead pay extra to debt account; it will reduce the monthly interest rate amount to support you recover faster.
- Reduce monthly repayment: You might be having multiple credit cards; some of which you might not be using but will be paying the cost of holding. Review the balance of each credit card and reduce the numbers of credit cards as well as pay all the balance due drawing interest.
- Rent a part of new home: If you plan properly, you can adjust in a part of new home by reducing the extra goods that you don’t need. You can arrange the essential items in better order to save the space; just focus on utilizing vertical spaces for storage. The rental income will help you recover from the repayment liability.
- Encourage family members to earn: Home staying members can earn in their spare time if they want to contribute for your mission to live a debt free life at the earliest. How much they earn doesn’t matter, but their contribution and understanding of importance of saving matter a lot to help you recover financially earlier.
Concluding Note:
Home buying is a long term process; the happiness brings along with the long-term repayment liability also. By improving the cash management, the goal of home buying and recovering faster can be achieved earlier then you expect. Explore the options to increase the saving by earning more and minimizing expenses. The planning, financial commitment, execution of plans, and combined contribution will certainly help you come out of after effects of home buying.
