Getting onto the property ladder is harder than ever for first-time buyers, with a recent report suggesting that as few as 20% of those aged 25 own their own property, compared to 46% twenty years ago.
Getting yourself a mortgage can be overwhelming for first-time buyers, so we’re going to go through the basics.
Making Sure You’re Ready
First things first, you need to make sure that your finances are in order and that you’re actually in a position to be able to afford a mortgage.
Obviously, the more you have saved up, and the better your credit rating is, then the more chance you’re going to have.
First things first, check out your credit score, which you can do for free at sites such as ClearScore.
April 2014 saw new rules come in (which you can read more about here), which mean that lenders must carry out stricter checks before granting mortgages, meaning that you can expect to be quizzed on your all of your outgoings, things such as mobile phone contracts and gym memberships.
So make sure that you’re prepared, and that you’ve got all the necessary details on your earnings and outgoings to hand before getting started.
While the cost of a mortgage itself is obviously high, there are also lots of other costs that come with buying your first house, which you might not be aware of.
Other costs which you’ll have to bear in mind include broker fees, valuation and survey fees, stamp duty, legal costs and more.
Once all the fees and costs are added up, they could well be into the thousands, which could really start to eat into your deposit, so bear this in mind, as it may be better to hang on a few months till you have a bit more in the kitty.
Bear in mind that there’ll also be costs once the mortgage is secured, such as upkeep and maintenance, and home insurance.
Of course, the deposit is the most important aspect of securing your mortgage, and obviously, the higher percentage of the full cost you can put down, the better.
The standard amount which is expected is 25%, so if you can afford this, then you should have access a decent amount of mortgage deals, but for the absolute best deal, you want to aim for closer 40% if possible.
While of course, we’d recommend placing as high a deposit as possible, it is still possible to gain one with as little as 15% or 10%.
There are plenty of handy tools such as MoneySavingExpert.com’s Ultimate Mortgage Calculator, which will help you work out how long you’d need to save for a deposit, amongst other things.
Choosing the Right Deal
The final step is perhaps the hardest, with so many different lenders and mortgage options available to you.
While it’s important to do as much research as possible, it’s a good idea to get in touch with the experts.
No-fee mortgage brokers such as Search Mortgage Solutions can use their expert knowledge to scour the whole of the market to find the very best mortgage deal for you and your circumstances.
We spoke to David from SMS, who said: “Because of our strong relationships with mortgage lenders, we can offer our clients a true ‘whole of the market’ offering, including many deals which aren’t available on the high street.
Getting a mortgage can be a difficult process, but once you get there, the rewards are completely worth it. Good luck!