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First Time Buyer? Ingard can Help!

Taking that first step onto the property ladder is a massive milestone in anyone’s life. It is hugely exciting, but can seem daunting and complicated. The cost-of-living crisis and increased interest rates have only exasperated this, and made meeting affordability requirements more difficult. First Time Buyers made up 25% of the market in 2023 even with the additional challenges faced, so buying that first home is certainly still possible! The signs so far in 2024 are positive, despite the slight unexpected rise in inflation in December.

Many Lenders have started the year reducing their rates and expanding their product ranges, showing a real willingness to lend and help more customers. There are more high LTV products available on the market (for those with a smaller % deposit in relation to the property value), as well as a few lenders with 100% mortgage options. There are also Lenders accepting a variety of deposit sources, and a number of other schemes available to help with affordability, such as shared-ownership or mortgages where a family member may be named on the mortgage but not on the property deeds.

Last week, the Bank of England announced they would hold the base rate at 5.25% for the 4th time, following 14 previous rises.

It may all seem overwhelming. Perhaps this is why the majority of those looking for a mortgage use an adviser, to simplify the process. We will source the cheapest deal available to you based on your individual circumstances, from the whole of market. We’ll help you understand the terminology used by Lenders and Solicitors, and make sure you are aware of other costs you may incur, such as stamp duty. We will also be there to help you navigate every step of the process, from making sure you are ready to start viewing realistic properties all the way through to getting the keys to your new home, and arranging any insurance policies you may need.

We’ve put together some tips to help you prepare if you are looking to buy your first home, but our biggest tip would be to speak with a qualified mortgage adviser, for all the reasons we’ve just mentioned!

Top Tips:

  1. Don’t believe everything you read on the internet, or what you are told by others who may be unqualified. Make sure you do your research and understand the downfalls of comparison sites- often insurance premiums are cheaper because the policy isn’t as comprehensive.
  2. Taking out additional credit doesn’t automatically improve your credit score. If you don’t have much credit, your score can improve by taking a credit card for example, but ONLY if you keep up all repayments. The score itself often isn’t the most important thing a Lender will be looking at.
  3. Check your credit score. Many companies offer free trials for a period e.g., 30 days. Do remember to cancel if you do not want to continue paying for the service, but it is very worthwhile and can help identify fraudulent activity.
  4. Regularly check your bank accounts to ensure everything is as it should be. Use different and secure passwords for each account.
  5. If you are struggling to pay any creditors, speak to them ASAP to try and arrange a payment plan. Don’t bury your head in the sand!
  6. Be careful with short term payment plans or “buy now pay later” schemes. It can be tempting, but you can quickly lose track and struggle to afford repayments. Some of these companies may claim that your credit score won’t be affected, but this doesn’t mean missed payments aren’t visible to potential Lenders on your credit file.
  7. Before you move, put together a list of your current outgoings to get used to budgeting. Carefully consider what changes there will be to your outgoings when you move. As an example, if you and a partner are moving out of your family homes, there may be less eating out etc. but you will now have your own household bills. There is no point being too strict in order to afford a larger mortgage, as it won’t be sustainable for you.
  8. Never make payments without double checking the payee details. As an example, solicitors will never email bank details for you to pay a deposit. These will be given on their official documentation, and you should call to confirm.
  9. Conduct your bank accounts sensibly. Advisers will look at these to assess affordability, and Lenders may also ask for them. If you bank with the Lender you are looking to take a mortgage with, they will have full access and a record of your conduct. Make sure you have payees set up with their names, and sensible annotations (not jokes). Large amounts of, or regular gambling is not looked upon favourably by Lenders.
  10. Don’t delay taking out insurance. No-one is invincible, and you can secure lower premiums by taking protection out at a young age. It isn’t nice to think about, but consider the financial impact should you be unable to work due to accident or illness, or worst case scenario if you were to pass away during your mortgage term. Some products e.g., buildings insurance may also be compulsory in order to complete on your mortgage.