Buying your first house in today’s property climate is no easy task, but it is certainly a rewarding one. Millennials don’t have it all on a plate, and it takes a lot of determination, not to mention giving up those sacred avocado toasts ;). Whilst you might see buying your first home as a long way off, it’s never too early to begin preparing. You can look into different schemes which might help you to get your foot on the ladder earlier than expected, and it’s good to know exactly what buying a house entails. Know where you stand, and if the dream of buying a house is actually closer than you may think!
Organise Your Finances
It’s easier said than done, but having your finances in order makes a whole world of difference when it comes to applying for your first mortgage. Know your spending inside out. Keep a track of your monthly bills as well as other costs such as food, socialising, and even that monthly Netflix subscription. Find a method which suits you, whether that’s keeping a spreadsheet or a finances notebook where you can easily track on-average how much money is leaving your account each month.
Minimise Your Existing Debts
If possible, try and work to bring down any existing credit or store card debt, as it will help you in the long run. Not only will it look more appealing to mortgage lenders, it will ease the stress on you personally. It’s not always possible to pay off your debts before applying for a mortgage, but if you have several credit cards which you’re paying interest on, it might be worth consolidating these debts onto a new interest-free credit card. Use a free online comparison website to find the best deal, and set a monthly direct debit so you don’t miss a payment, and clear your debt quicker.
Know What Lenders Are Looking For
It’s good to have an idea of what lenders will be looking for when you do come round to applying for your first time buyers mortgage. You may be asked questions about your specific lifestyle spending, such as subscription fees. Also be wary of any red flags such as payments to gambling companies – as this may be a warning sign to lenders.
Cut Down Your Costs
Is there anywhere where you could reduce your spending? Try and look into cutting down your costs, whether that be reducing your phone bill or saying goodbye to that weekly box of snack deliveries. These are luxuries that you can pick back up again when you’ve got your mortgage, but you want your finances to look as attractive as possible when you’re applying for a mortgage. If you can live without it, consider getting rid of it.
Save Save Save
The bigger your initial deposit, the easier it will be to obtain a first time buyer mortgage for your first home. If you’re trying to get a large loan-to-value mortgage with a very small deposit, you might have a harder time convincing the lenders you can pay it all back. It’s never too early to begin saving, and you’ll only be thankful in the long run. Analyse your current spending, and decide whether buying a house is a priority for you. It might mean cutting back on the post-work drinks and holidays, but it’s only temporary and once you get those keys to your first abode, you might be thankful!