First-Time Buyers: 5 Top Tips for Securing a Mortgage
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| Top 5 Tips for Securing a Mortgage |
With surging housing prices and rising interest rates following the epidemic, first-time buyers are finding it more difficult to get a mortgage. However, there are several programs in place to assist first-time home purchasers.
Here are five excellent ideas to help first-time buyers get a mortgage.
1. Save a deposit
Saving for a down payment is perhaps the most difficult, but also the most significant, step in purchasing your first home. You should try to save around 10% of the property's worth, yet the larger your deposit, the better your mortgage will be.
There are several methods to save your money quickly. Taking up a government-backed bank account, such as a lifetime ISA, means that the state will match your savings by 25% to help you buy your first house. Loans or gifts of money from family members are other frequent ways to increase your deposit, and cutting down on needless expenses like lunches out, gym memberships, and vacations in the near term might help you save quicker.
If you're struggling to save, the government has established a 95% mortgage initiative to help first-time buyers get on the home ladder.
2. Audit your whole income
It's critical to know precisely how much money you'll have coming in. You should calculate your household's net income (total income after taxes). To get an accurate picture of how much you have to spend each month, calculate your key monthly outgoings, which include food, transport expenses, insurance, bills, phone contracts, and healthcare.
When they review your application, mortgage lenders will need to see this.
3. Hold off on shifting jobs
If you're considering shifting employment, you may want to wait until you've secured your mortgage. Many lenders want to see a record of stable work, such as three to six months in your current position or many years of financial history for self-employed individuals.
4. Improve your credit score
When you apply for a mortgage, lenders will consider your credit score. Remember that if you are buying a house with others, your individual credit ratings will be evaluated. There are various actions you may take to enhance your credit score and get a better mortgage rate.
Join the electoral register if you haven't already.
Pay off the outstanding obligations.
Take out a credit card and make timely payments.
Separate your finances from low-scoring spouses, relatives, or friends.
Before purchasing a property, you should start improving your credit score as soon as possible. If your credit score is low, you will have a difficult time finding a suitable mortgage lender.
5. Speak with a mortgage advisor
Speaking with a mortgage expert can help you understand precisely what mortgage options you are qualified for. Mortgage advisors are independent specialists who have access to offers that are not available on the main street, so using their professional expertise will provide you with a clear picture of what you can and cannot afford depending on your specific circumstances.
Many advisors give fee-free guidance, so you don't have to pay anything.