Getting on the property ladder can be hugely challenging. When you’ve made it, however, it can be hugely rewarding. If nothing else, you're building up equity in an asset rather than handing over rent. If you’re thinking of buying your first home in 2023, here are some tips to help.
Maximise your deposit
There’s still time to open a Lifetime ISA (LISA). You can put up to £4K PA in it and get a 25% bonus at the end of the (financial) year. If you only have a Lifetime ISA for one year, this will only be £1K. It is, however, £1K of free money. If you’re looking to buy a home in 2024 or beyond, then you should certainly look at a (LISA).
If you can save more than £4K PA, then you will need somewhere else to put your money. A regular Cash ISA is likely to be your best option. If it’s your only ISA, (for that year), you can save up to £20K PA in it. You don’t get a bonus but you do get your interest sheltered from tax.
If you’ve been investing to build up funds, then you’ll need a plan for converting your shares into cash. It may be advisable to get help from a financial advisor.
Work on your credit records
Ask your landlord if they will report your rent payments to the credit bureaux. If they won’t, then consider signing up for a rent-reporting service. At the very least, keep a close eye on your credit records. If you see any unexpected events, follow up on them promptly. Mistakes do happen. If they happen to you, you need them corrected before you apply for a mortgage.
Check whether you qualify for assistance to buy
The two Help-To-Buy schemes (Equity Loan and Mortgage Guarantee) are not the only forms of assistance for first-time buyers. There is also the First Homes Scheme. The main qualification criteria for this scheme are set by the government. Local authorities can, however, fine-tune these criteria. You, therefore, need to check the details for your local area.
Shared ownership can also be a way to get on the property ladder at a relatively low cost. Many shared-ownership schemes have a path to buying the property outright. Again, check the details of the scheme(s) in your local area.
Find a mortgage broker
A mortgage broker will be able to assess your finances and advise how much you can really afford to spend on a property. They will also know where you are most likely to get the most suitable deal
It’s impossible to overstate the importance of getting the best possible deal on your mortgage. Remember, mortgages may have relatively low interest rates (compared to other credit products). They are, however, for very large amounts. This means that getting anything less than the most suitable deal can get very expensive very quickly.
Get pre-approved for a mortgage
Ideally, you should be pre-approved for a mortgage before you even start looking for a place to buy. There can, however, be a bit of leeway here, especially in a slow-moving market. If you do happen to see a property that’s a good fit for you, you can try approaching the seller.
As long as they are convinced that you are a serious buyer, they may let you view the property. Being able to tell them that you have at least started the mortgage pre-approval process may do a lot to get them to take you seriously.
Line up a conveyancer
Good conveyancers are always in demand, even when the housing market is relatively slow. Do your best to find a reputable conveyancer in your area before you start your home search. This can make the process towards completion both much quicker and much easier.
For mortgage advice, please get in touch
We do not advise on investment products, and we act as introducers for it
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