Getting on the property ladder

“I didn’t think I could buy a house”

AS A BROKER, THE MOST COMMON PHRASE I HEAR FROM FIRST TIME BUYERS IS “I DIDN’T THINK I COULD BUY A HOUSE”

For me, whilst I have been in the industry for over 18 years, the feeling of gratitude from someone achieving something they didn’t think they could do like owning a house never grows old.

Sure, for some people, it may be straight forward and plain sailing to get on the property ladder. For others, we have to do a lot more work. However, there are things that you can do to help you get on the ladder.

I asked a few people – what would you want to know as a first time buyer? The answer is the same I have had each and every time. The key things to getting a “Yes”.

There is lots that I could write about but I will break this down in to some of the key areas.

  1. Deposit – As a minimum you will need a 5% deposit. The greater deposit, this can mean the more chance of getting accepted. Purely because the lenders will credit score your application differently. You need to prove you can borrow money and pay it back. That you have not defaulted on payments. Which leads me on to the next point.
  2. Credit Score – Many people get hung up on their score. The best thing you can do is view a copy of your credit report and ensure there are no nasty surprises on there. No parking fines that led to a CCJ. We use Check my File as it covers all three credit reference agencies. You can get a free* copy by using the free trial period, simply click this link Check my File Report
  3. Affordability – Think about purchases that you make in the lead up to buying a house. These days you can even use Klarna to but a luxury trip up The Shard in London, spreading payments over 3,6,9 or 12 months. Whilst it may seem attractive to spread payments over a longer time and not use savings/income, these payments could reduce the amount that a lender will let you borrow. Lenders allow for some degree of credit commitments, as most people these days will at least have some form of car finance.

Those are some of the key points lenders will look at. However – what about the practical advice? What order should you do things in? How much does it *really* cost to buy a house. They say Rightmove or Zoopla is the adult version of viewing the Argos catalogue as a child (might be showing my age here!). My advice that I tell all my clients and friends is speak to a broker first. See what is realistic for you to afford- both in terms of what a lender would give you, and what those mortgage payments would be. For some people a lender may let them borrow a huge amount, but the monthly payments may be too high for their lifestyle. It’s a fine balance. Buying a home and making it lovely, but ensuring that you can still afford a life. No-one wants to buy a house and only be able to afford to stay in it 24/7. Covid made us all realise we need escapes. We need to ‘live life’ – in our own way.

When buying a house – you want to make it your home. So another tip I give is about factoring in some spare savings for those home furnishing. Sure, we all think about the basics such as solicitor’s costs, professional surveys, stamp duty and your deposit. My strong advice is always allow a buffer. Until you have been to Dunelm or Ikea – you will have no idea how much things costs – have you seen the price of bins, rugs and curtain poles these days?!

Save, Save, Save

Save, save, save every month or week, on the day that you get paid. Forget about that money, live on a smaller budget. I found when I was younger, saving with a different bank from my current account was easier. I had less access to it. Internet banking is so easy these days to just move the money back. Set a plan in place.

Once you feel you are ready to start the process, speak to a broker and get an idea of figures. A decision in principle is needed with most estate agents these days to either view, or offer, on a property. This can be with any broker. Some estate agents may insist you see their broker but they cannot enforce this. If you come across this, there is legislation about it, just ask your broker.

If I can be of any assistance in the process then please let me know

Megan Kearney – Mortgage & Protection Adviser

megan@mortgage1st.co.uk – 07971 678594

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