Mortgage advice from a financial professional

Like it or love it, climbing the real estate ladder is still a major milestone in adult life, despite the tremendous boom in property prices and the rather opaque mortgage system. The pandemic first got many young women to face their finances and home savings is a goal for many, but with rumors about how difficult it can be to get on the property ladder or get a permit for a mortgage, it can be a nerve-wracking process. Here’s what you need to know about getting your first mortgage, whether your plans are imminent or a few years later – it never hurts to be prepared …

The government’s 95% mortgage program will help first-time home buyers or current homeowners secure a mortgage with just a 5% down payment

Save your deposit in the smartest way possible

For most people, the five-figure security deposit is the first and biggest hurdle on the way to owning a home. If you are saving yourself for your deposit, you will likely invest a large part of your income in savings, but it is worth verifying that you are maximizing your money. For starters, you can deposit the first £ 4,000 of your annual savings into a Lifetime ISA, and the government will give you an additional £ 1,000 free on top of your deposit. For the next £ 10,000, Chip + 1 is your best saver with instant access, a referral only account with a 1.25% return on your savings. Use these two tools to their maximum capacity and that’s an additional £ 1,125 on your home savings without doing anything – and you can multiply that by two if you’re saving with a partner or friend.

Use innovative solutions to organize yourself

There are some great tools out there that help with budgeting, saving, and lifestyle designing to organize your finances in a more mortgage friendly way. With the new apps Nude and Claro, you can set goals for each, with Nude specifically geared towards those who are saving for a home. Lifetise is a similar platform that also has a handy homefinder tool that will create a custom savings plan for you. It also connects to the online mortgage broker Trussle when you are ready to start the mortgage process. Use all the tools available to find out what you can afford to achieve your goal and get your saving habits in shape. You may also want to check the completed statements on some mortgage providers and comparison websites to find out what type of mortgage you could be granted.

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Maintaining your creditworthiness is a good habit for building your financial confidence in general, but it is really important before you apply for a mortgage. It is not the actual number that banks are looking at, but rather the report of your financial behavior that affects the valuation. That means it’s best to avoid things like taking on new debt and using buy-it-now, paying for later services at least six months before you apply, and always making sure that you pay bills and utilities on time. If you are currently renting, you can use a tool like Credtiladder to add your rental payments to your credit report, which should be reassuring for banks looking to borrow from as it shows that you can and will pay consistently and on time.

Know when to use a mortgage advisor

In many cases it is fine to shop around and apply for the mortgage direct with your chosen lender, but if your finances or work arrangements are something “unusual” – ex. B. If you are self-employed or have a history of debt – you may want to speak to a mortgage broker or mortgage advisor (they are the same). These specialists can help you find the best deal for your situation and they will also help you make sure your records are correct and give you reassurance and support throughout the process.

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When buying a house, not only do you have to pay a deposit, but also legal fees, stamp duty and searches. These vary based on the size and price of your property, so it’s a really good idea to research them and make sure you factor them into your deposits. If you also need new furniture, or the house needs to be decorated or renovated, you need to consider these costs as well.

Keep up the good work after you get your mortgage

Taking out a mortgage and having the keys to your first property in your hands is a big cause to celebrate, but remember that owning a property is a great financial responsibility as well as a great privilege. Keep track of the budgeting and organization that have allowed you to save your deposit and maintain your mortgage, and make sure you have an emergency fund to cover your mortgage repayments if you lose your job or become sick. You may also have new things to save for now that you’ve unlocked that great life goal – like a vacation!

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