Save, save, save
The more you can save toward a deposit, the better your chances of securing a mortgage. Most lenders will expect you to bank at least 5% of a property’s value before loaning the rest. This may seem impossible with rising house prices and high living expenses, but using online money management tools, careful budgeting, and re-evaluating spending habits can go a long way toward reaching your savings goal. Being savvy about where you keep your savings can also boost your deposit. For example, savers aged under 40 can open a Lifetime ISA account, which offers a tax-free boost of up to £1,000 a year toward either buying a first home or saving for retirement.
Check your credit score
Your credit score will have a big impact on whether lenders accept or decline your mortgage application, so knowing where you stand before you apply is essential. There are many free online resources you can use to find out your current credit score. If yours is less than ideal, make sure you settle any outstanding debts and set up regular payments for monthly bills. Not having any credit history can negatively impact your credit score, so opening a credit card that you make small purchases on each month and pay off in full can help to build up credit history.
Look at available government schemes
The government offers several initiatives assisting first-time buyers onto the property ladder. The Help to Buy equity loan (a government loan of up to 20%) is available to buyers with a 5% deposit who purchase new build properties of up to £600,000. You may also wish to consider a shared ownership scheme, which allows buyers to purchase a share of a home (between 25% and 75%) from a local housing association and pay rent on the part they don’t own, with the option of purchasing more of the home over time.
Research your mortgage options
There are many different types of mortgages and choosing which to apply for can be overwhelming. Talk to an independent mortgage adviser about your options – they will be able to give you a realistic idea of what your maximum budget will be, advise you on monthly costs, and recommend a good lender for your circumstances.
Ready to buy your first house? The team at Lillicrap Chilcott can help you find your perfect fit. See our website for available listings or call us on 01872 273473 to arrange a viewing.