The traditional aspirations of buying a house that you can call home have become harder to achieve for first-time buyers in the current market conditions but there are still plenty of ways and means to turn that dream into a reality.
Here is a look at how you can take that all-important first step and buy your first property, including an insight into strategies for raising the deposit you need and how to ensure you don’t overstretch your finances.
Affordability is a key issue
Gone are the days where the key criteria were how much you earned each year, which was then used as a lending multiple to determine how much you could borrow from a mortgage lender.
The current mortgage landscape is equally focused on what you currently spend each month and that information is just as important as your annual salary.
Affordability rules are now in place to see whether your current income compared to your outgoings are sufficiently far enough apart to say that you can comfortably afford to make the mortgage payment on top of your other regular bills.
You can learn more about mortgages, for example, and find out what sort of deal might be available to you in your current circumstances, but a good starting point in your quest to get on the property ladder would be to take a look at your current outgoings and see where that puts you in terms of making a successful mortgage application.
Take the time to sit down and calculate your current outgoings and see whether there are any adjustments you can make and sacrifices that would make your financial position stronger when you make a mortgage application and your monthly expenditure comes under the microscope.
Open the door to better mortgage deals
Saving a large deposit for your first home is fundamental to being offered the best possible mortgage deals, which can mean lower monthly payments too.
Many lenders recognize that saving a large deposit is going to be difficult for some applicants and there are deals available where you might be able to pay as little as a 5% deposit, especially if you are buying a new home and the builder is offering an incentive scheme.
The government has at least made some contribution toward helping buyers with only a minimal deposit get on the housing ladder, with services like Help-to-Buy, but the fact remains that your chances of getting a home loan and the best possible rates are often tied to the size of the deposit you can offer toward the purchase price.
If you can find a way of saving a deposit equivalent to 15% of the purchase price, this should put you in a stronger position to make a successful mortgage application, but having 10% or 5% does not mean you will be excluded from the first-time buyer dream.
First-time buyers tip
Making adjustments to your lifestyle and ditching any monthly expenses that are not necessary is a win-win situation. It improves your affordability figures when you make the mortgage application and it speeds up your march toward your savings goal for the deposit.
Your credit rating matters
Another pivotal aspect of your mortgage application will be your credit score and if it is not looking as good as it could be that could be an issue when it comes to getting your loan approved.
Always check your credit rating on a regular basis and check for any errors as well as getting an idea of what lenders will be looking at in regards to your credit.
Every missed payment can lower your credit score and applying for too much credit can have a detrimental impact on your score too. Take steps to rectify any mistakes on your report and do everything you can to improve your credit rating before you make your mortgage application.
Leave it to a professional
The mortgage market can be complicated and some lenders might be more interested in your loan application based on your circumstances, than others.
It is very hard to know which lender to make your application to and how to present your information in the best possible way so that you improve your chances of getting a positive response.
Using a mortgage professional should eliminate that guesswork and improve your odds of finding the best deal and the lender most likely to help you fulfill your ambition of becoming a property owner.
Getting on the property ladder might have got harder in recent times but there are plenty of things you can do to ensure that you get the chance to call your house a home.