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 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 we 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. Click the links below for more information.
- First Homes Scheme (England only)
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.
2. 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.
3. 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 chance securing a mortgage with that.
What if you haven’t been able to save for a deposit? 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.
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.
Helpful?
For the first time buyers out there, we hope you have found this blog useful. It cannot be stressed enough that your very first step on this journey should be to select your chosen mortgage professional. We thoroughly enjoy being selected as part of someone’s personal financial team, we help and guide clients through the whole process, providing advice, conducting research and support every step of the way. Support and advice isn’t always solely related to the mortgage either; from insurances, surveys, conveyancers, builders to utilities and we have even been known to discuss a bit of interior design too!
Get in touch today!
Do get in touch for a no obligation consultation to get you on that first step. Visit www.holmemortgages.co.uk or email enquiries@holmemortgages.co.uk.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH REPAYMENTS ON YOUR MORTGAGE.
Holme Mortgages is a trade name of Supreme Financial Solutions Ltd, which is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority. Approved by The Openwork Partnership on 05/07/2024.