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First Time Buyer

A FTB Guide to Getting on the Property Ladder

While the property market has experienced a turbulent time in 2016, there have been many reasons for first time buyers (FTBs) to feel more optimistic and positive about getting on the property ladder. With 5% deposits becoming more common and other forms of assistance available, FTBs who are serious about buying a home have a genuine opportunity to find and buy a home.

It is important that a FTB is aware of the challenges of buying a home and takes the appropriate steps to buy property.

A deposit is crucial

A hugely important step that should be undertaken as quickly as possible is recognising the need for a deposit. The sooner you start to save, and the more effective your saving is, the better your chances of obtaining an affordable mortgage will be. You may wonder how you will be able to save but taking a “little and often” approach can help and you should be strict in creating, and then following a budget.

Help To Buy Your Home ISA

You’ll also find assistance from the Government. The Help To Buy ISA gives you the chance to benefit from an additional sum (up to £3,000) on top of your own savings. If you are looking to buy property as a couple, you can both have your own Help To Buy ISA, allowing you to benefit from a larger sum.

Lenders are offering higher loan to value (LTV) mortgages, which means that you may not need as much for a deposit as you previously thought; or you may find the combination of your deposit and a better LTV mortgage will allow you to buy a better standard of property.

Know what costs are involved when buying your home online

While you should be looking to save money for your deposit, you need to be aware of costs over and above the property price. You will need to pay for legal fees, valuations, removal costs and other fees, so be sure of every cost involved with the process and then make sure you have the finances to cover all of these costs.

It probably doesn’t need said that often but first time buyers have to be sure about their finances and they need to be confident they can withstand shocks or surprises. Buying a home is the biggest purchase in a person’s life, and it needs to be treated with respect.

Research and understand the mortgage market

It is important that you are aware of the mortgage market and you find the option that is best for your needs. There are many professionals operating in this field and it makes sense to speak to a financial advisor or a mortgage broker to familiarise yourself with what is on offer. When you know what the market provides and requires from you, you’ll be in a better place to make a decision on what sort of mortgage is right for you.

Improve your credit score

The better your credit score and credit report is, the greater your chances will be of being accepted for a mortgage.  Things you can do to improve your credit score include:

  • Be listed on the electoral roll at your current property
  • Pay off credit debt
  • Don’t apply for any credit in the run-up to looking for a mortgage

You need to be realistic about your finances and what you can afford to pay each month. Mortgage lenders will review your finances and make a judgment on what they expect you to be able to pay, so you need to think along these lines yourself.

Once you know what sort of mortgage you are likely to be approved for, or what ballpark figure you are operating in, you will have a better understanding of what property you can afford. This is when you can start to look seriously at properties and enlist the support or guidance of estate agents to help you find your dream home.

There is currently more support for FTBs than there has been in a good while, so any first time buyer thinking about getting on the property market should seriously look at the available options.