Property prices are on their way up in the UK, and according to some experts, the average price for a first-time buyer went up by 5% in 2017, to around £190,000. This means that you’re taking on a huge loan if you want the comfort of having your very own house. The good news for those nervous about stepping onto the property ladder for the first time is that there are some ways that you can improve your chances of success. The following tips will not only help to improve your chances of approval with your mortgage application but also help to ensure that you’re spending money safely too.
Work Out What You Can Afford
Before you start looking at homes that are potentially well out of your budget, it’s worth thinking about what you can realistically advice. Look at where you might like to live and consider the kind of budget you might be able to put down. There are online mortgage calculators available that can help you to figure out your spending potential. Remember to factor in things like interest rate rises. There’s a good chance that interest rates will go up in a few years, and you want to be prepared if that happens. Additionally, consider things like first-time buyer schemes that might help to make your deposit more affordable.
Start Saving for a Deposit as Soon as Possible
The more significant the deposit you can put down for your chosen house, the more affordable your mortgage will become. A higher loan-to-value rate means that you get a better mortgage rate from your lender overall. While your parents and other people in your family might be able to help, there’s a good chance that you’ll need to manage most of the expense yourself. As soon as you get a job of your own, you should start thinking about putting a portion of your income away to saving for the property of your dreams. This will help to make buying a property more affordable while showing lenders that you have the ability to save.
Make Yourself You’re Attractive to Lenders
Mortgage lenders are constantly looking for evidence that the people they work with will be able to keep up with their repayments. Make sure that you show your lenders that you’re a good investment by keeping an eye on your credit rating, and paying off any debts that you might have on time. It’s also worth cutting back on unnecessary spending that might suggest you’re being too frivolous with your cash habits. If you don’t already have a copy of your credit report, you should be able to track one down online for free. Try using a service that won’t leave a mark on your history when you get your report.
Prepare Your Documents in Advance
When you do end up getting a mortgage offer, you’ll find that most banks will only allow that offer to last for a maximum of 90 days. That means it’s important to ensure you’re ready to commit to your mortgage as quickly as possible. When preparing documents, you’re going to need at least six months of your current bank account statements, along with your last three months of work pay slips too. You could also benefit from around two to three years of accounting from a professional if you’re self-employed. You should also have full details about the person selling the property, as well as the solicitor you’re using, and the real-estate agent involved.
Remember to Account for Hidden Fees
When you’re buying a home for the first time, it’s easy to forget that there are more costs involved than just the overall expense of buying the house. For instance, you’ll need to pay legal fees for conveyancing and land registry, and you’ll also need to shell out for surveyor’s fees to make sure that you’re protected from any structural issues in the home. Some people also like to prepare by saving back some money for removal firms too. After all, the cost of actually moving to a new house can be quite significant.
Shop Around for the Best Deals
Usually, it’s helpful to get a professional mortgage advisor’s help when you’re comparing deals on the market. That’s because these people have access to exclusive offers and information that you might not get elsewhere. However, if you do decide to go it alone, make sure that you compare carefully, looking not only at interest fees and APR but also the extra benefits that certain accounts might offer.
Double Check the Property Before Deciding
Finally, remember that buying a home is a huge investment. Make sure that the house you choose is definitely right for you before you commit to a mortgage. There’s nothing wrong with going back to check out a potential home a number of times before you make your decision.