If you’re considering buying your first property, you’ll probably feel quite nervous and unsure about taking the next step. Considering that it’s likely to signify the largest purchase that you’ve ever made, this is entirely normal, and it’s not something that should discourage you.
One of the best ways to deal with these nerves and put yourself at ease is by providing honest answers to a few simple questions. It can be all too easy to want to jump the gun and try to scale the property ladder before you’re ready, so it’s important to make sure that you’re in the right financial and emotional situation to buy.
If you’re eager to take the next step, then here are three essential considerations to take into account…
#1: Do You Have a Healthy Credit Record?
A mortgage is a form of lending, not all that dissimilar in its mechanisms and makeup to taking out an ordinary loan. As a result, lending companies will want to assess your risk level before extending any credit to you, and if this is found to be wanting, you may find that you’re turned down out of hand. This will put a temporary end to your buying aspirations, so it’s a good idea to take care of the situation prior to approaching any lenders. The best way to build up a positive credit history is to take out a credit card or loan for six months to a year, paying off all of your bills as they come in. You can then cancel the borrowing facility when you no longer have need of it, and be left with a positive financial record to present to potential lenders.
#2: Is Your Employment Situation Stable?
Another factor that will be used to assess your suitability is your employment situation. Those who are self-employed may really struggle to find a willing lender, and as a result, a specialist professional enterprise may be your only recourse. Similarly, those who have only been in their current role for six months or less may find that they’re regarded as a high risk borrower, and struggle to secure the most beneficial deals when it comes to taking out a mortgage. The best solution is simply to put your plans on hold for half a year, save some more money, and approach lenders afresh when you have a little more job security under your belt.
#3: Do You Have a Suitable Deposit Saved?
Thirdly and finally, ask yourself this: have you saved a suitable deposit? The more money you can provide yourself, the more favourable the terms that you’ll be able to secure, so spending a little time on building up your savings is a very good idea. Help to Buy ISAs are a wonderful tool to aid you in achieving this end, and can really boost your overall total.
Are you ready to buy your first home?