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Monday, 21 May 2018

Five Things You Must Do Before You Get On the Property Ladder

for-sale, sign, house, buying, flickr

In case you are thinking about owning your own home, instead of renting or living in your parents’ house, you have a hard work ahead. Your chances of securing a mortgage that allows you to buy your dream home are much worse than people in your parents’ generation. You will need to have a solid financial history and plan ahead to get the rate you can afford and the amount you need. To improve your chances, below you will find a few tips.

Have a Steady Job (Or Income)

You must have a steady job or a good employment history to get accepted for a mortgage. Even if you can prove that you are earning a lot of commissions, and have been in the past year, this is not enough for banks. You will have to have a long-term job, or - if you run your own business - a steady regular income. Self-employed people often find it harder to get on the property ladder, especially if they have only started their venture a few years ago.

Build Your Credit History

It is also important that you make the lender trust you. Without any credit in your name, they will have no idea if you are able to make the monthly repayments. It might be a good idea to take out a credit card a year before you apply for your first mortgage or have a car loan, a mobile phone contract, or car insurance so you can prove yourself.

Consolidate Your Debt

You should also avoid applying for a mortgage with loads of outstanding credit. If you have credit card debt or multiple loans, it might be a good idea to sort out your finances first. Check out debtconsolidation.loans to find out more about the options available. It is always better to have one account you make regular repayments on than credit all over the place.

Learn to Budget

Buying your first home will change a lot of things about your budget. You will have to prioritise your regular payments, and this might mean you have to cut back on eating out or partying. You have to grow up to the responsibilities of homeowners and make sure that you have savings to cover emergencies, such as a broken down boiler or an electrical fault.

Save Up for the Deposit

Today, first-time buyers need at least 5-20 percent deposit. The more you can save up for the deposit the lower your monthly repayments on the mortgage will be. You should look at online mortgage calculators and create a saving plan so you don’t pay back more on the amount you borrow than necessary.

First-time buyers have a hard job securing a mortgage and making ends meet. You can increase your chances of getting accepted for a mortgage if you follow the above steps. Learn to be responsible for your money, start saving up early, budget carefully, and you are one step closer to your dream home.

* This is a contributed post

Have you managed to get on the property ladder? What do you think? Let me know in the comments below!

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