When people imagine buying a house in UK, they usually think that it is impossible without cash or loans in hand. However, there are options to buy a house even if you do not have any initial capital.
There is no need to rely on bank money for getting the first home for yourself as there are other ways of financing and purchasing of the house. Let us look at the few options that are available for a regular person to buy a house in UK:
Option 1: Get a mortgage
This is probably the most familiar option here and the favorite way of getting loans by many first-time buyers. A mortgage can cover up to 95% of the property value and you need to pay 5% as a down payment.
How to get a mortgage? The best way is to go through a broker or lender who will check your credit history and assess your eligibility for the loan. You can get a mortgage of up to £500000.
Option 2: Buy with cash
This option requires that you have a fund of cash ready to invest in a house. You can use your savings, or help from family and friends to buy the house you are looking at.
What is a ‘part exchange’? Part-exchange is buying a property with an existing property that you already own. So if your old home is worth £90 000 and you want a new one for £210 000, you get the builder to pay off your old mortgage debt.
Option 3: Raise money through crowdfunding
Crowdfunding is an alternative way of raising funds from private individuals and businesses. You can raise up to £1million by looking for people who are willing to invest in your property project.
The good thing about crowdfunding is that it helps in collecting small sums from a number of sources to make up the total amount required. This option can be particularly useful for people who have excellent ideas but do not have sufficient funds to implement them.
Option 4: Buy property with rent guarantee
Rent guarantee means that you don’t have to pay the rent but the landlord pays it instead. If you are not able to find tenants easily, this option can come in handy if your building project is new and you do not have any clients yet.
Option 5: Buy property with guarantee of sale
You can also buy a house that has been repossessed by banks and the government. In this case, you are required to pay less amount than a regular home would cost in an auction. You may have to offer as little as 10% of the property’s value and get 90% at a later date after selling other assets that you possess .
Option 6: Buy property with cash back guarantee
You can also get a house with cashback guarantee. This means that you don’t have to pay the full price at once; instead, you will be asked to pay only 10% of its value as down payment and the rest 90% is paid back over a number of years.