The prospect of buying a house and getting a foot on the property ladder can be both exciting and daunting – many first-time buyers devote their time to finding the perfect property rather the complicated financial aspect of buying a house.
If you need help at any step of the way and would prefer to speak to someone call our mortgage service which is provided by Seico Mortgages: 0800 840 6500
|Company||Loan to Value||Initial Rate||Period||Incentives||Costs|
|90%||5.39%||2 Years||none||fee free||Proceed|
|90%||4.99%||2 Years||none||£599 product fee||Proceed|
|90%||5.49%||5 Years||£250 cashback and free valuation||£99 fee||Proceed|
|90%||5.69%||2 Years||£250 cashback and free valuation||£495 fee||Proceed|
|85%||4.85% (fixed)||5 Years||none||£995 fee||Proceed|
|85%||4.50% (fixed)||2 Years||none||£995 fee||Proceed|
So, before you start talking to estate agents or viewing properties, it’s vital to take a good look at your finances and work out exactly what you can afford.
Use our top tips for first-time buyers to make sure that you’re really ready to enter the property market.
1. Save, save, save
There are 90% LTV (loan to value ratio or the percentage of the value of the property that you need to borrow) mortgages on the market, but the bigger the deposit you have, the better. Mortgages with a lower LTV usually come with a lower interest rate, so your monthly repayments will be more affordable.
It’s not just getting the biggest possible deposit that you need to think about either – you also need to cover the cost of paying legal fees and, if applicable, stamp duty.
Make sure your savings are working hard for you too – compare savings accounts to find the best rate, set up a monthly direct debit from your current account to your savings account, and if you think you might be tempted to dip into your savings, consider a fixed rate bond which often won’t allow you to make withdrawals until a set date.
2. Take a look at your budget
Use our free budget templates to analyse your income and outgoings and identify areas where you could cut your spending. Cutting back on small things, like buying lunch or a coffee at work every day, can make a big difference over time.
3. Give your finances a health-check
Having a healthy credit history is essential when it comes to finding a mortgage. Check your credit report to get a snapshot of your outstanding credit. You can see your credit accounts and how much you owe in one place – your mobile phone, shopping catalogues and gas & electricity bills, as well as credit cards, loans and mortgages.
You’ll also be able to check that all the information it contains is correct. If you notice any errors, you can contact the relevant lender and ask for them to be corrected – but bear in mind that you will be expected to provide proof that a mistake has been made. If you have a good reason (like a serious illness) for any credit problems, you can add a Notice of Correction to your account which potential lenders will be able to see – but again, be prepared to provide proof.
4. Register to vote
If you aren’t on the electoral roll at your current address, get on it now – lenders will check that you’re on the electoral roll at your given address when deciding whether or not to lend to you as a precaution against fraud, so it’s vital that you’re registered.
5. Get to know the mortgage market
Don’t just look at mortgage rates from one or two lenders – look at what’s on offer from a range of different providers to make sure you find the best deal for you.
6. Think creatively
Getting on the property ladder as a first-time buyer is tough, so you might need to think creatively to become a homeowner. An increasing number of people are opting to buy with friends, and there are also plenty of shared equity schemes, in which you buy a percentage of property and a commercial partner like a housing association owns the rest. There are also government scheme to help key workers, like teachers, nurses and police officers, buy a house.
7. Apply with caution
When you are finally ready to apply for your mortgage, make sure you read the small print and avoid making multiple applications just to see what kind of offer you will get at all costs.
Every mortgage application you make leaves a record on your credit report that can be seen by other lenders, and this can harm your credit rating. Lots of applications in a short space of time may make it look like you are desperate for money or that fraud is being committed.