Buying your first home can be difficult but there are things you can do to can help get your foot on the property ladder.
Pay Down Debt
The first priority when trying to get on the property ladder is to pay down any debt.
One of the things that mortgage lenders look at, is how much you spend every month on unsecured debt repayments such as loans and credit cards.
This will help them assess how much mortgage payment you can afford.
First time buyers tend to buy properties costing around £220,000, to build a decent deposit you would need to start saving. Also, being careful with your money generally is good as lenders consider spending patterns.
For example, spending money on coffees daily or takeaways could count as regular expenditure and have a negative impact on the amount you’re allowed to borrow.
You should take steps to increase your credit score. This is used to determine whether building and bank societies can lend to you.
You can usually access your credit score and report free of charge. You can improve your credit scored by not being late on repayments.
You need to make sure the home you want is in budget, and that your new home is suited to your needs – close to work, good schools if required, transport links, and general local amenities.
Leg up Schemes
The government have schemes in place to help first time buyers, a lot of these schemes consist of you paying a certain amount and the government cover the rest with a loan.
There is a shared ownership option, this where you own a certain amount of the home and a housing association owns another part, and you pay rent for the portion you don’t own.
Ask Your Parents
Your parents are always a good option to help you out. They can lend you money and wont charge interest when you repay them. Lenders are accepting of parents being guarantors on your mortgage. As guarantors this makes them liable to repay the mortgage, lenders are likely to lend more money.
Every first home tends to not be your dream home but starting small even if it’s just a one-bedroom apartment at least you’ve got a foothold in the property market.
Rent A Room
Once you’ve purchased your home, you could always rent out a room, this can generate some extra cash. Under the rent a room scheme you can earn up to £7500 a year tax free from a lodger.
If you are looking to purchase your first home, please feel free to get in touch with us here.