Getting your first mortgage –
Mortgage advice
First Time Buyers – Things to consider
First Time Buyers in Evesham have noticed that it has become increasingly complicated over the last number of years to get a foot on the property ladder, especially with house prices higher and lenders requiring higher deposits in certain circumstances. However, with some careful planning and consideration of the options available it is still possible to be able to buy that first home of your own, and helping you to be able to do that is one of our specialities!
If you’d like to have a chat about your circumstances, to find out more about how you can get your First Time Buyer mortgage and the options for buying your first home, you can give us a call on 01386 800500 and talk to Stuart Wallace, our mortgage adviser, or if you’d rather we call you back you can contact us and leave your details.
Preparing to get a mortgage
With the amount of new housing being built in Evesham, Pershore and the surrounding villages over the last few years we have seen a significant increase in people coming to see us looking to buy their first home. Through this we have found that there are some common areas that we are asking people to think about in preparation for applying for that first mortgage, whether it be a standard purchase or using one of the Government backed schemes such as ‘help to buy’.
Below are a few of the key areas to consider that might affect your first mortgage application:
Your Credit File
One of the first things that we would recommend you do when we talk to you would be to get hold of a copy of your credit file. The information about your credit score and your credit history will play a big part in a mortgage lender’s ability to lend you the money that you want.
There are three main credit reference agencies in the UK. Equifax, Experian and Call Credit. Each of these have their own services which allow you to get your credit report for free:
ClearScore from Equifax – ClearScore is a free for life service and is used by a lot of lenders
Credit Expert from Experian – This is the most widely used credit reference agency but only provides free access for 30 days, after which it becomes a paid for service
CreditKarma from Call Credit – CreditKarma is again free for life and very easy to use, they do have a paid for service, but there is no need to sign up for this.
They each offer slightly different options from 30 day trial to ‘free for life’ credit reports. Once you have your credit report we can go through this with you and highlight any areas which we believe you need to address or consider before your mortgage application such as:
- Presence on the electoral roll – being registered on the electoral roll can affect your credit score and determine whether the lender will require extra proof of residence with your mortgage application
- Missed payments – Missed payments on loans and credit cards will affect the way the lender looks at your application for a mortgage
- Outstanding loans and credit cards – We will sit with you and discuss your outstanding credit, and whether or not you should try to pay any of this off prior to taking out a mortgage
- Defaults or County Court Judgements – Credit items like these can be restrictive of which lenders we can approach for your mortgage, depending on the amount, how long ago it was and whether or not it has been satisfied. So it’s important that we know about these up front (Don’t worry too much though – poor credit doesn’t necessarily mean you won’t be able to get a mortgage!)
Your Outstanding Debt
Having loans, credit cards or store cards is often seen as a negative, but we would encourage you to talk to us about these if you are thinking about paying them off before your mortgage application. We will take you through a full process of understanding your income and outgoings, and how these might change once you buy your own home. Quite often having well managed credit is a good sign for a lender as it shows that you are able to manage regular commitments.
Having said this, as with any credit commitment, it is important that you keep up the payments on your credit cards or loans.
Your Monthly Expenditure
Lenders like to see regular saving but they dislike overdrafts permanently at the limit or constant use of credit card borrowing. There are things such as regular internet gambling that are also frowned on by some lenders so spending some time talking to Stuart before you plan on taking a mortgage can help get you on the right foundation.
Your deposit/savings
Lenders like to see that applicants have saved some money towards the deposit/solicitors costs even if they have been fortunate enough to have been gifted some money by a parent or Grand-Parent…..
