Getting onto the property ladder can be difficult for first-time buyers, with hefty deposits needed and an increasingly competitive market, but if you’re looking to buy your first home, there are a few ways that you can help yourself into the best position when it comes to moving out and gaining independence. Saving for a deposit can be the most difficult aspect of buying a house, you will also need to improve your credit score, and make sure that you are paying off bills like a payday loan on time and in full to be in with a chance of being approved for a mortgage. Read on to find out a few tips and tricks that can come in handy when buying your first home.
Save for a deposit
Before you can get the ball rolling with buying your house, you’re going to need to save for a deposit to get you into the best position, and so that you can choose a property that is suitable for you. Generally, you’ll need a deposit of around 5-10% of the price of the home you are choosing, and then you will be able to apply for a mortgage to borrow the rest – however, it is best to save as much as you can, so if you’re not in a hurry, taking a little more time so that you can build up your deposit means that you will be able to take advantage of lower interest rates, and lower monthly payments in some cases. It can be difficult when saving for a deposit – it is a lot of money! And those that have been saving for a while may begin to feel like they aren’t getting anywhere. If this is the case, you have the option to put your savings into a Lifetime ISA, which means your money can be topped up by the government by up to £1000 a year.
Improve credit score
Your credit score plays an important role in buying your first home. It is there to show lenders how trustworthy you are when it comes to borrowing and repaying loans and bills. Your credit score is measured up to 999, which is the highest, and best it can be. Generally, 670 onwards is considered a good credit score, so it is essential that you find out your current credit score, and how you can make improvements.
Make sure that you pay your bills on time and in full, including paying off your credit cards and previous loans. Showing your lender that you can make payments means they will be more likely to approve your application for a mortgage, and even offer you lower interest rates.
Compare mortgage lenders
When buying a house for the first time, you’re going to have to find a mortgage lender that is right for you. The amount that you can lend will depend on how much you have saved for a deposit, your monthly income (if you’re buying with a partner, they will consider their income too) and your credit score. The loan that you are offered will depend on the lender that you choose, so it is always worth comparing so that you get the best deal. You should remember that it’s not just mortgage payments that will cost you – you’ll need to factor in conveyancing and surveys and other costs too.
Research your area
Once you’ve done your research on lenders and how much you can afford to borrow, you can start thinking about where you’d like to live! This is one of the most exciting parts of buying a new home, but before you can decide that this is the best place for you, you should do a bit of research – think about the commute, how far your local amenities are, school catchment areas and transport links are advantageous too. This can be a huge help when deciding where you’d like to buy.
Although you can view properties online on estate agents’ websites and various apps, it is essential that you view any potential properties in person so that you get a real idea of what you’re working with. Photos can be deceiving – they can make rooms seem bigger than they are, so going for a look around them in person means you can get a feel for the property that you can’t when you’re looking at photos on a screen.
Getting onto the property ladder can be difficult for everyone, especially if you are starting from scratch when it comes to building your deposit. If you are becoming disheartened when it comes to buying your first property, there is no shame in asking for help! The most obvious place to ask for help is from your parents, or other family members – most will be happy to help you in one way or another, whether that’s helping you to build your deposit, or acting as tenants in common. Money that is contributed by family means greater security in the eyes of the lender, and therefore a better interest rate on your mortgage.