Let’s Talk ‘First Time Buyers’

It is no secret that it is becoming more and more difficult to take that first step on the property ladder. With house prices rising at a much faster rate than our wages, many people rely on a mortgage to take that first step to buying their own home. As we move into 2023 and continue to feel the effects of the general cost of living soaring, it can feel impossible for so many first time buyers. In this blog, I have highlighted the numerous schemes available and shared some top tips on how to avoid any potential mistakes!

Support and Schemes

Even though you may have seen in the media details of the Help to Buy Equity Loan Scheme ending in October 2022, please be aware there are lots of others out there that could just be suitable for you.

  1. Shared Ownership – https://www.gov.uk/shared-ownership-scheme
  2. First Homes Scheme – https://www.gov.uk/first-homes-scheme (England only)
  3. Help to Build Scheme – https://www.ownyourhome.gov.uk/scheme/help-to-build
  4. Rent to Buy Scheme – https://www.gov.uk/rent-to-buy

These schemes have various eligibility criteria so do get in touch if you wish to discuss further.

Top Tips

  1. Affordability

Do not make any assumptions on what you can loan from a lender. People often talk about being able to borrow 4 or 4 ½ times their salary. Get this confirmed by a Mortgage Advisor as so many other factors including existing credit commitments, credit score, deposit, number of dependents and how you are employed can affect this. 

Have your house shopping budget confirmed from the outset by securing a Decision in Principle. This will give you a clear idea of what you can borrow therefore not wasting your, the estate agents or the sellers time when you begin the house hunting journey. 

  1. Credit Profile

Lenders assess your credit profile, not just your credit score. There are lots of little steps to maximize your credit score. Make sure you are on the electoral role, could you take out a credit card – spend a tiny amount on it each month and pay it off to create a credit profile for yourself? Most importantly, familiarise yourself with your credit report/score.

  1. Deposit

Some lenders are now offering 95% LTV mortgages, this means if you have managed to save a minimum 5% of the property value as a deposit then you may have a change securing a mortgage with that. 

What if you haven’t been able to save for a deposit? Well be aware that deposits can come from a variety of sources, these could include:  

  • Personal savings
  • Inheritance  
  • Gifted deposits  
  • A family mortgage where a deposit from a family member can sit in an account, accumulate interest and be the deposit
  • Sale of any assets 
  • In some special cases personal loans or credit cards may be able to make up some of your deposit 

But just remember you must prove the source of the funds of your deposit as a legal requirement. And if you have a family member willing to gift you a deposit additional paperwork will be required to confirm it is a gift.

Do get in touch for a free of charge consultation to get you on that first step. Visit laurahansonmortgages.co.uk or email laura@holmemortgages.co.uk

As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.