So after a lot of toing and froing with the idea of buying a house, we’ve finally decided that we’re going to do it! EEEEKK! But, what do we need to sort out in the next 20 odd months to get us on track to getting on the mortgage ladder?
In a way, I still wonder what on earth we’re thinking.
Check out Ricky’s thoughts from our Instagram story at the bottom of this post.
Don’t scroll yet…there’s more to read…
It was only a few years back that we were drowning in debt, spent money quicker than we’d make it and were just in a very bad place financially.
Fast forward, and by getting our butts in gear, and coming up with a master plan to ditch our debt and transform our lives, we then hit a bit of a rut.
I mean I know it’s obvious that once debt is gone that you start saving, so we did. We saved each month, putting money into high interest accounts, we saved with Chip and will religiously save with the 1p Saving Challenge.
But, it didn’t feel like it was enough. Something was missing. The spark we had to get things done was gone.
We tried to work out why and couldn’t really see what was wrong. For the first time, ever, we had a bit of spare cash and felt comfortable. If we wanted to do something we could, but having money didn’t actually make us happy.
We seemed to be happier and more efficient when we were in debt, working hard to pay it off.
Then it hit us. We didn’t actually have a goal anymore.
We kept talking about what we were actually going to save for. Getting an emergency fund was obvious, but after that, we started getting ideas of a house, a car, holiday, tattoo removal (don’t ask!), driving lessons (I still don’t have a licence), upgrading our furniture, another holiday.
Trouble is, all the talking of what we wanted never came to anything. Yes, we carried on putting a few quid away, but we didn’t really know what to do with it.
Having been careful with spending money on big purchases got us stuck in a rut of not knowing how we should prioritise our spending, or if we should even save up to spend at all.
To buy or not to buy
I don’t know what changed our minds, but it just came to us one evening.
All the parts started fitting together as we knew we could rent the same property for a chunk of time. It could have been this on its own, and it might have given us relief and comfort that we’d be safe renting for months to come.
There is always an unsureness when renting and in the months leading up to a renewal date. I always get twitchy.
I can’t shake the idea at the back of my mind that we’ll need to move again. Pay out hundreds of pounds in fees to an estate agent, pack up our lives, go through trying to convince landlords and estate agents that, although our credit reports are dire that we will pay.
Knowing that we won’t need to move for months and months have given us the time we need to get that plan in place.
And, now is the time.
What do we actually need to do
Well, buying a house isn’t just about getting a wad of cash together.
There are a few things we need to sort out in the next 20 odd months to get us on track to getting on the mortgage ladder.
1. Save up
Yes, so we are saving. We are going to be saving hard.
Cutting bills, squirrelling away, saying no to expensive treats.
We are going to do anything (well, within reason) to keep our outgoings low and save into a high interest account.
2. Earn more
We can only save as much as we have coming in or can cut back any further.
This only means we need to work out ways to get more money coming into the Skint household.
Skint Dad is our job, so we want to make it as profitable and earn as much money for our family as possible (shameless plug, get in touch if you want to work with us).
We are also going to look at other ways we can earn more to get some extra savings aside.
3. Fix our credit
There is grass, underneath is mud, then there are worms, and then comes both of our credit files.
Low, low, low, low, low.
We need to get them better. No amount of a deposit is going to get any lender happily giving us a mortgage so we need to make some improvements.
The best way to do this is by getting in debt again. However, this time, we will be getting into debt on purpose and will be using credit responsibly and the right way.
We’ve both applied for (eye-wateringly-ridiculous-high-interest) credit cards and will be putting them to use.
We don’t have huge credit limits, but that’s fine. We don’t want lots of credit.
With our cards, we’ll do a shop, say for petrol or a food shop, then pay it off full at the end of the month.
This way, we won’t pay a penny interest (result!) and will it will show lenders we can be trusted with the money we borrow.
4. Be (more) conscious of our spending
There seem to be a lot of hoops when it comes to getting a mortgage nowadays and I can only see things getting worse.
I’ve heard that if you get £30 out of a cash machine on a Friday night, then get another £20 out later, then do this a few times a month, a mortgage lender will see it as reckless spending, as you didn’t know how much you needed.
Is this true?
While we’re not out on the town each weekend (I sure don’t have the energy for that anymore!) we need to hone in on what our spending looks like.
We need to be conscious about what we buy. While we don’t need to have our bank statements looking sparkly from day one, we are going to start investigating what we need to do, if we’ve got a bank account with the right bank, if we need to bank separately, what we need to do to make our habits look as best as possible.
5. Don’t look at Right Move
What we’re not planning to do is start looking at any property just yet.
We’ve got a long haul to get to the end of our savings target.
We don’t want to start looking at properties, fall in love then not get it.
Have any tips? ….please?