Buying a home takes careful preparation and planning. As well as finding a property you like, you need to get your finances in good order before lenders review them and assess your ability to make repayments on your loan.
During the recent lockdown, many lenders pulled their ‘high loan-to-value (LTV)’ products which typically only require a deposit of 5% or 10% (often first-time buyers) to take out a mortgage. The good news is that lenders are returning to the high LTV market but you may need to act quickly to secure the deals. This is where we can help as we have our finger on the pulse. Save as much as you can towards a deposit. Open a dedicated savings or investment account and make sure it’s paying a competitive interest rate.
Check your credit score
Even if you’re remortgaging or moving up the housing ladder, your credit history will be important. A good credit rating can help you secure a better mortgage deal, with a lower interest rate. The general rule is the higher the score the better, and the more likely you’ll be accepted for a mortgage or other credit. If you’re looking to take out a mortgage or remortgage, check your credit score regularly. You can usually get a simple overview for free and it pays to check with several different sources. Credit Karma, Equifax, Clear Score and Experian all offer a service to help you understand your rating.
If you find it is lower than expected there are ways to improve it:
• Pay more than your minimum payments on credit cards
• Bring your overdraft down
• Close unused credit accounts
• Register for the electoral roll
It’s important to review your income and outgoings. If you have accounts, memberships or subscriptions that you no longer use, it makes sense to close them down. Prospective lenders will also look at the debt you currently have, including whether your current account is in credit. If you have any savings, it makes sense to pay off loans and credit cards but be sure to leave yourself enough saved to cover emergencies.
Support from families
Research carried out suggests the bank of Mum and Dad or even the bank of Gran and Grandad will help to buy 175,000 homes during 2020 by lending or giving you cash to help with a deposit or acting as a guarantor.
Get some good advice
As qualified and professional mortgage advisers we know what a good deal looks like, we know the market and we’ll do the hard work for you.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE