Whoop you’re planning to make your first step on to the property ladder!! Go you! Its exciting and fun looking for houses, planning the decor, dreaming about your dream home. But it is also blinking scary when you think about the money side of it, the amount you will be required to pay each month, the length of the mortgage term, the interest! Its the biggest commitment most of us will ever make when you think about it.
But there is no need to stress, buying a house doesn’t need to be scary or difficult if you take it step by step and focus on your end goal of home ownership! Here you’ll find 5 first time buyer tips and tricks to help make your more appealing to mortgage lenders and help you get on the property ladder!
Where to start!
Let’s assume you’ve already saved your deposit (or a good chunk of it!) because that really is step one towards purchasing your first home. For many it is a step that will take a number of years of focus and budgeting to achieve. So you’ve got your deposit and you’ve started looking for the perfect house, what’s next?
First Time Buyer Tips
1.Work out how much you can afford
Get out some good old pen and paper and write out a budget! List your total monthly income (whether your purchasing solo or as a couple), then all your basic outgoings and expenses (you may want to look at the average cost of things like water, electricity, internet, etc in the area you are planning to move to) You need to see how much you could potentially have to cover a mortgage payment.
Next you need to see how much of a mortgage you are likely to qualify for according to your income and the deposit you have. Once you know how much mortgage you may be able to qualify for you can start properly looking for your new home within your budget
2.Look at all your options
Don’t jump on the first option you see, even if it seems like a great offer. Keep your options open and use comparison sites to look at all your different options. Play around with the term of your mortgage and even your deposit amount so you can see what other options may become available with slight tweaks. You may be looking at a hefty mortgage so consider something like jumbo mortgage wholesale lenders to give you the best chance of lending the full amount you require for your purchase.
3.Understand your mortgage repayments
You can use a mortgage calculator to estimate repayments depending on the value of your home, how much deposit you have, interest rate and term of the mortgage. It will give you a break down of the estimated monthly cost and the total amount payable with interest. You’ll be able to see if you are likely to be able to make the monthly repayments from the budget you originally made.
4.Pay down debt and lower your outgoings
The last thing mortgage lenders want to see is that you owe thousands of pounds to credit cards or buy now pay later loans, it doesn’t make your affordability prospects look good! Before you try applying for a mortgage consider paying down as much of your debt as you can. Lowering your debts will prove you are responsible with your money management and can handle a mortgage repayment.
It can also be helpful to start lowering your general outgoings, (things like subscriptions, monthly bills, non essential purchases), for a few months prior to applying for a mortgage. Again this help show you can afford a mortgage repayment, and will improve your affordability score with a mortgage lender.
5.Keep building that deposit
Even if you think you have a big enough deposit, whilst you wait to find the perfect house and start your mortgage application keep adding to your deposit if you are able to. Mortgage lenders offer much better rates for those who have a larger deposit so the more money you can set aside towards your deposit the better position you will be in when you finally find your dream home and start an official mortgage application.
If in doubt…consider a mortgage broker!
Sometimes it is just simpler to get some help! If you’re finding it hard to find the right mortgage for you, or you’re struggling to understand how much you can borrow, then a mortgage broker might be a good idea. They will be able to calculate your affordability, help you understand your mortgage application, and will have access to far more mortgage options than you may be able to find on your own. They often are able to access special rates and mortgages with different companies to the larger known names.
Good luck on your hunt and purchase of your perfect first home!
