With property prices booming in the UK right now, it might feel like you will never get a photo on the property ladder as a first-time buyer. While it is a seller’s market and many Millenials and Gen Z’ers are struggling to afford to purchase their first home, it isn’t impossible; you just need to know how to best approach the UK market to get the best mortgage option for you.
Save Early
This is something you will likely have heard many times over, but if you aren’t lucky enough to be given a deposit or have a windfall, making sure you have at least a 10% deposit and money to cover fees means you need to save well before you even contemplate applying for a mortgage. For some, this could be years before. Try not to rush into anything, and make sure you know precisely where the funds are coming from and how you will afford everything once you sign on the dotted line.
Help To Buy ISA and Lifetime ISAs are great options for saving for a deposit and can boost your savings fund considerably.
Research Your Mortgage Options Carefully
There are many different mortgage options available for you to choose from, and while not all will be suitable for everyone, there will be some you are more eligible for than others to support your home purchase.
A first home scheme can help first-time buyers afford a home. 90% and 95% mortgages can be a good option for those struggling with building a larger deposit along with rent-to-buy schemes. You might want to work with a mortgage broker to assess all of your options.
Improve Your Credit Rating
You can also benefit from preferential rates too. The better your credit rating, the more likely it is for your mortgage application to be approved. The better your debt to income ratio, the more likely your mortgage will be approved. Ideally, your debt levels should be less than 36% of your income. Other small tips include making sure you are registered on the electoral roll, avoiding missed payments, paying down debts, closing unused credit accounts, avoiding maxing out credit cards or shopping accounts and fixing any errors on your credit file.
Be Realistic About What You Can Afford
There is a lot of emphasis on finding a home that invokes a strong feeling in you. However, for some, this feeling drives their search leading them to consider homes out of reach of their budget or even preferred location.
Avoid looking at houses above your maximum budget and be honest with yourself about your must-haves and your wants. This can help you to stay on track. Remember, it doesn’t need to be your forever home, it can be a stepping stone before moving onto a different home in the future, or you can afford a bigger house.
When it comes to finding suitable options for you as a first-time buyer, while the road might not have been as easy as it was for older generations, it isn’t impossible, and there are plenty of options for first-time buyers to secure their new property.
