There are certain goals in life that everyone wants to achieve, and for most of us, foremost on our list is to start climbing the rungs of the property ladder. Though we’ve all dreamed of owning our first home, however, the reality is that very few of us can do it without some financial assistance.
Usually, your first port of call will be a mortgage lender, but with so many to choose from, the task of finding the right company can seem daunting. Yet too many people jump the gun and start their search before they’re actually ready. So, before you begin home hunting, take the time to sit down, answer these questions, and see whether you’re really ready to take out a mortgage?
#1: Do You Have a Positive Credit History?
One of the key criteria that mortgage providers like Saffron Building Society will assess you on is your financial history. If you have a record of indebtedness, this could cause some real problems for you, so it’s worth taking the time to try and remedy the situation. One of the best ways to improve your rating is by taking out a credit card for a period of six months or so, making sure that you meet every repayment on time. This is also a good idea for those who don’t have any credit history at all.
#2: Are You in a Stable Job?
Provided that you have a positive credit history, you’ll also need to be in a stable job in order to get the best terms for your mortgage. Those who are self-employed or have held their current role for less than six months will really struggle to find a lender willing to extend capital to them. If you fall into the latter category, the solution is simple, and you can wait for half a year or so before you consider applying for a mortgage. However, if you’re self-employed, or don’t have a permanent contract, you may need to either look for alternative employment as a temporary measure, or else explore specialist options that are catered to professionals in your position.
#3: Do You Have a Large Enough Deposit?
Although there are some lenders who will extend capital to those who have only five per cent of the purchase price in their bank, the smaller your deposit is, the harsher the terms that you’ll have to accept. It really can be worthwhile to put off your purchase for a few more months or years whilst you build a bigger deposit, as you’ll find that there are much better deals available for those who have more money to offer upfront.
If you’re considering taking out your first mortgage, is now really the right time to do it?