According to data from Lloyds Bank, the average house price in UK cities in 2018 was just over £248,000, which is more than seven times the average salary. This makes it difficult for many people to purchase a home, but there are numerous things first-time buyers may do to increase their chances of doing so. Mountview Financial Solutions, a leading mortgage broker near me, gives you the best advice and tips for first-time buyers.
Best Tips For First-time Buyer Mortgage Advice
Top up your deposit for free:
First-time buyers frequently face challenges with the deposit. It could seem as though your savings goal is far away even though you are saving every spare dollar. In this circumstance, the Lifetime ISA (LISA), which increases savings by a maximum of £1000 annually, may be helpful.
As long as you are between 18 and 39, you can open a LISA and save up to £4,000 annually for retirement, a home purchase, or both. Your payments will be increased by 25% by the government, up to a maximum of £1,000 annually. Money from a LISA can be used to buy a first home valued up to £450,000 after a year.
The maximum bonus is £33,000, but you can only get it if you create an account when you’re 18 and put money away every year until you’re 50.
You can open a LISA even if you currently have a Help to Buy ISA (new account opening for this program stopped on 30 November 2019). However, the bonus from one can only apply to purchasing a home.
Improve your credit score
Lenders will review your credit history when you apply for a mortgage to determine how you have handled the previous borrowing. They’ll consider this data when choosing whether or not to extend you a mortgage. A credit reference agency may provide a copy of your credit report upon request. You should consider ways to improve your credit score before applying.
- Always pay back bills on schedule.
- Inactive credit card accounts should be closed.
- Take a credit card and pay off the monthly balance if you’ve never borrowed money.
Look into government schemes
You might be eligible for the government’s Help to Buy program, which supports first time home buyers. This plan has multiple components. The first phase, known as the “equity loan,” is making a 5% down payment and the government financing you 20% without charging you interest for the first five years.
You can get a loan for up to 40% of the value of your home in London.
This part of the Help to Buy program is only available if you’re buying a new build property that costs up to £600,000. It is open till 2021. The second element of Help to Buy is shared ownership, which allows you to own 25% or 75% of a home while continuing to pay rent on the remaining portion.
Consider buying with friends or family.
Can you buy a house with a friend or family if you can’t afford to do it alone? Make sure you explain what will happen if one of you decides to sell in the future if you’re thinking about doing this.
Moreover, you should consider how you will divide the property between you, especially if one of you is contributing a more considerable portion of the deposit. When buying a home together, you can be joint tenants or tenants in common.
If you and the other party are tenants in common, you can divide the property’s ownership as you wish and leave your portion to a surviving family after your death. However, if you and the other person are joint tenants, your share of the property will pass to them upon your passing.
Get help from mum and dad
You can go up the property ladder with your parents’ help without paying anything. When you apply for a mortgage, some lenders will take into consideration your savings, but the funds remain in their name. You’ll be able to get a lower mortgage rate because doing this gives the lender more security.
Conclusion:
For first-time buyer mortgage advice, consult Mountview Financial Solutions or email us at info@mountviewfs.co.uk. They will be able to help you with your application and recommend the best mortgage for you.
