If you are looking to make that first step on the property ladder and buy your first home, we have gathered some useful hints and tips you may like to consider.
If you have been saving for a deposit, make sure you check the interest rate you are earning and move the money to a different account if there is a better rate available.
You may like to look at the Help to Buy ISA. You can make a £1,200 initial payment then save up to £200 a month, receiving a 25% bonus payment when you buy. These accounts do have terms and restrictions which you will need to check with your bank when you open the account.
Check your credit rating
When you apply for a mortgage, the lenders will be looking at your credit history, so the more you can do to improve it the better. It is a good idea to try to avoid applying for any new major borrowing such as credit cards or loans in the six months before making the application and if you can avoid it for longer, that’s even better.
Don’t miss any payments on credit cards or other borrowings as these will have a negative impact on your score. You may also like to check your credit report is correct as any errors or inconsistencies such as different addresses can damage your rating, but are easy to correct. Lastly, make sure you are registered on the electoral roll as this helps prove your identity.
Work out what you can afford to buy
Even if you have a good deposit saved, it is important to speak to a mortgage adviser to find out how much you can borrow. As different banks have different rules regarding this, some may lend up to four and half times your annual income, while others may only multiply your income by three, by speaking to an adviser who deals with a range of lenders, you will be able to get the best possible idea of how much you can borrow and also how much you can afford to repay per month.
At Mackenzie Smith, we have an in house mortgage specialist who can advise you on all of this and he will also look at your monthly expenses and day-to-day spending as lenders can reject you, or limit how much they will lend you if they think you don’t manage your money well enough.
See if schemes can help you
There are schemes such as Help to Buy, designed to make it easier for first-time buyers and home movers to purchase a home. This may be a good option if you are struggling to get a deposit.
Watch out for additional costs
Lastly, don’t forget there will be extra things you need to pay for, from solicitor fees and stamp duty to moving costs and decorating. It is easy to get caught out and you will also need to consider any ongoing expenses that will go up, for example, maintenance on a bigger property or moving up a Council Tax band.
For more information on the financial implications of buying your first home and also for expert mortgage advise relating to a range of lenders, please contact our resident specialist Andrew Fagg on 07720 353866 or email@example.com .
Davenport Financial Management Ltd is authorised and regulated by the Financial Conduct Authority. Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.