As everyone knows, buying your first home is a daunting prospect nowadays. The average price of a UK new build starter home is approximately £176,780 and it’s estimated that nearly nine out of 10 potential buyers haven’t the money needed for the deposit. That means nearly six million people have resigned themselves to renting for the foreseeable future. Yet, there are ways to get on the property ladder in the UK no matter how challenging a task it may seem. Here are some tips to help you do just that.
Get your finances in order
Even if being in a position to buy a property seems a distant prospect at this present time, when you do come across that dream home, you need to be able to seize the opportunity. So now is the time to make a comprehensive list of all the money coming into your household and what is going out. That means you can immediately go to a lender and show you’re, at the very least, financially responsible and be in a position to apply for a mortgage.
Save as much as you can
This is related to the previous point but also involves making cutbacks where you can and saving every penny towards your new home. Based on current figures, a 5% deposit for an average starter home would mean you need to save £8,838. That’s £736.50 per month over a year or £368.25 per month over two years. Remember, once you find a property, it’s not just the property price you need to pay, but all extras such as solicitors fees and stamp duty. Work out what you need to save, how much you could save and how long it will take you to do so. Stick to your limits and buying that new home won’t stay a dream but become a reality.
Know your credit score
Are you good for credit? Are you sure? It’s relatively easy to find out your credit score nowadays with a number of companies offering services to do so. The importance of your credit score cannot be overestimated as this is one of the main ways your lender will decide whether you’re worthy of a mortgage or not. It can be surprising what a credit check can throw up. By finding out those unwanted surprises as soon as possible, you’ll have more time to rectify any mistakes or problems seen.
A pre-approval or mortgage in principle is written confirmation from a lender that you are good for credit. So when you do find that new home you want, you can confidently go back to the lender knowing much of the work in getting a mortgage is already done. In addition, many sellers will only accept offers from pre-approved buyers. Part of getting pre-approved involves finding the right lender, which means finding the one that is right for your particular circumstances. So don’t jump at the first lender that gives you an offer. In turn, it can be best to find a good mortgage broker who can find the right lender for you. They know the market and as a first-time buyer, their help can be invaluable to you.
These are just some of the steps you can take towards getting that first new home. There are some fantastic properties out there right now and with initiatives like Help to Buy available, buying your first home is a lot easier and more affordable than you may think.