Is this your first time?
Being a first time buyer (FTB) is tough. Did you know that according to the Financial Times the ‘Bank of Mum & Dad’ is now one of UK’s top 10 mortgage lenders? Gone are the days when FTBs were all spring chickens in their 20s; today we see people of all ages and circumstances applying for a mortgage on their first home. If this is your first time, here are a few tips:
- The deposit: at the date of writing you will need to supply at least 10% deposit, however in ‘normal’ times this can be as low as 5%. Have you considered other additional costs such as solicitors?
- LISA can help: if you are aged 18-39, you can take out a ‘Lifetime ISA’ savings account for your deposit. You can save up to £4,000 (and receive up to £1,000 bonus from the government!) each year. Worth considering!
- Work it out: lenders usually require at least one year of employment history; or two years tax documents if you are self-employed.
- Are you credit worthy? Most lenders will want to see your most recent 3 months bank statements. Make sure that your bank account is in good order; if you’re always breaching your overdraft limit, a lender may consider you to be living beyond your means. Having a well-managed credit card can be good for your credit record, but having a large balance, or missed/late payments can drag down your credit score, and make getting a mortgage trickier.
- Off the grid? Make sure that all of your documents (driver’s licence, bank statements etc) are registered at your current address. Also; get on the voter’s role! If a lender can’t trace you, this can delay your application.
Unsure? Your local ‘whole of market’ mortgage adviser can guide you through the whole process. Give us a call so we can help you prepare for your first time!