Are you planning to buy your first home this year? Get yourself MORTGAGE READY. There is a wealth of information to take in when buying your first home, and in the current market lenders are far stricter with lending criteria for first-time buyers. Most people dream of owning their own home, and usually, getting a mortgage is the only way to do it.
Getting onto the property ladder should be one of the most exciting things you’ll do but there is so much to think about, including finding the right mortgage.
HELP TO BUY SCHEME IN ENGLAND
The Government’s current Help to Buy scheme in England ended in March 2021 and a new one, just for first-time buyers, started on 1 April 2021. You can learn more about the Help to Buy Scheme here.
Still with just a 5% deposit and a 75% mortgage, first-time buyers may be able to borrow up to 20% of the cost of a new home from the Government, or 40% in London. The amount you can spend on your home will depend on where in England you’re looking to buy.
TIPS TO BOOST YOUR BORROWING POWER
If you’re planning to buy for the first time, it’s important that you’ve got your finances in order. It’s not just your income and deposit being scrutinised when taking out a mortgage.
MANAGE YOUR DEBTS WELL
Lenders want to see that you’re a good borrower, so for as long as you can before applying, make sure you’re paying debts and bills on time. Stay out of your overdraft and avoid emergency loans. And try not to apply for credit either – like a new credit card, or a mobile phone or car loan.
START SPENDING SENSIBLY
It also helps to prove that you can live on a budget and you know what your outgoings are. Start to track what you’re spending monthly on essentials, bills, loan repayments and any other financial commitments. Then you’ll be able to prove you know your finances inside out when you get to your mortgage interview.
STAY IN YOUR JOB
Lenders are often put off if you’ve been in
your job for a very short period (six months or less). So, if you’re planning to buy a house, don’t think about switching careers at the same time. You can do that after you’ve secured the mortgage and moved in.
TOP UP YOUR DEPOSIT
Most lenders typically require you to have a deposit of at least 5% of the value of the property you intend to buy, but 10% is even better. Lenders offer better rates the bigger your deposit is, and they usually improve at certain levels (so, if you have a 9% deposit saved, it’s definitely worth trying to break that 10% barrier).
CHECK YOUR CREDIT REPORT
You can get your report from a credit reference agency, we recommend you check Check My File. Occasionally they have errors, or you’ll see that your credit is still linked to an ex-partner or ex-housemate, which is affecting your score. You want all these problems corrected before you start a mortgage application. Not sure how to check your file – you will want to read this blog: “How to understand your Check My File Rating?”
GET ON THE ELECTORAL ROLL
You might not know it, but if you’re not registered to vote, or you’re still registered at an old address, it can affect your chances of getting a mortgage. Banks and lenders use the electoral roll for basic identity checks, so make sure your details are up to date.
If you’ve followed all of these recommendations, all that’s left to do is to get your paperwork together and put in your application. You could soon be on your way to the home of your dreams.
So if you are planning to buy your first home and want to be mortgage ready, pick up the phone and talk to one of our Mortgage Brokers – we’re here to help you and are always happy to answer questions. Remember the team have access to the whole of the market, we don’t charge a broker fee and genuinely want to help you get on the property ladder with the most suitable mortgage for your needs. You can contact us via the contact us page on the website or click the burgundy chat icon on the side of your screen.
At Yes Mortgage Services, we offer a comprehensive range of products from across the market.
Irrespective of whether you are looking to buy a new home, re-mortgage an existing property, or looking to protect your family from the unpredictability that life throws at it or protect your income if you are unable to work due to accident or ill health.
Yes Mortgage Services are committed to offering you the highest possible standards of service. We can undertake the whole process from answering the initial questions through to handling multiple product applications. Ensuring that everyone gets treated with the same urgency and maintaining your best interests are our main goals irrespective of the value of the mortgage.
We recognise that both we and our customers have everything to gain if we look after your best interests and treat you fairly in all aspect of our dealings with you.