More and more people in the UK are having to wait until they are in their thirties before they can even think about buying their first home. It’s not hard to see why with the average price of a property in Sevenoaks is currently sitting at a whopping £655,000!! (Zoopla, Oct 2019)
Even if you think you are many years away from buying, it’s never too early to start planning for a mortgage. Seriously! When you apply for a mortgage, lenders will look back as far as 6 years on your credit file, meaning that any bad credit you create now could impact you in the future.
You need to think about not only saving enough for a deposit, but also for fees and other moving costs. And that’s all alongside working out how much you will need to (or can!) borrow.
So, to make things easy, we’ve compiled a handy list of things to do BEFORE you start looking for your first home:
- Check your credit score – Complete an online credit check e.g. Experian or Credit Karma, to identify any credit issues. If you spot any, speak to a mortgage adviser to find out what this might mean and how you can start fixing it.
- Manage Debts – Minimise debts where possible including loans, credit cards & hire purchase agreements and avoid going into unauthorised overdrafts. This can really reduce you borrowing power.
- File your accounts – if you are self-employed or own a Ltd company, make sure you advise your accountant that you will be applying for a mortgage in the next few years. You will need 2-3 years of solid accounts for your mortgage application.
- Get quotes – Find out how much you will have to pay for solicitors & brokers fees, valuation & mortgage fees and work out how much, if any, stamp duty might be due.
- Work out your budget – Ask your mortgage adviser to work out how much you can afford to borrow.
- Set a savings target – Calculate how much you will need to save to cover your deposit & associated fees
- Decision in principle – ask your mortgage adviser to apply for your Decision in Principle, sometimes called Agreement in Principle (DIP / AIP). This is your ticket to lend and means you are now ready to look at properties!
If you would like help with planning your first house purchase contact Astra for further advice