29 Dec 2020

Five things you should do before buying your first home

Five things you should do before buying your first home

After a rotten 2020, we're all making big plans for 2021 - including many who will be stepping onto the property ladder and buying their first home.

If you are one of them, then there are steps you can take right now to get ahead of the market  - even if you are stuck in tier four restrictions!

Here are our five top tips for first-time buyers...

1) Get your credit report

Imagine if there was a way to find out what everyone was saying about you behind your back. Would you use it? Of course you would!

That’s pretty much what your credit report is. The organisations who lend you money share information with each other to check the veracity and credit-worthiness of applicants.

These reports contain details of your address history, any financial connections you have (joint borrowing or joint accounts) as well as details of your existing borrowing and payment history. Therefore, your credit score of vital importance, particularly if you are away to apply for a mortgage.

Most UK mortgage lenders will pull your credit file from one of the three main credit reference agencies – Equifax, TransUnion and Experian.

The good news is that you can see exactly what is on these reports online. ClearScore uses Equifax data, Credit Karma uses TransUnion and you can see your Experian score direct on its website. 

2) Pump up that score

Once you have a clearer picture of your credit score, you can work on improving it – and some of the steps are very easy.

The most obvious – and important – step is to ensure you are paying all of your bills on time. Late or missed payments will send your score tumbling in the wrong direction.

Simple steps like making sure you are on the electoral register can also help. Most of these websites will advise you on the best steps to take to improve your credit score.

It is also beneficial to strike a balance between using your credit card (if you have one) little and often, while keeping the total amount of debt on the card low.

3) Speak to an independent mortgage adviser

We are all creatures of habit, which is why many people stick with the same bank from their first ever account right through to their savings and investments. However, this isn’t always a smart move when it comes to mortgages. 

If you go to your bank for a mortgage deal, they will only show you their mortgage products, which varies from tens to hundreds. However, if you go to an independent adviser, like Aberdein Considine, they’ll be able to access thousands of mortgage products across the whole market.

More choice means more chance of finding the best possible deal. In the overwhelming majority of cases, this service is provided free of charge by Aberdein Considine and you can click here to start your application online.

4) Boost your deposit

It may seem obvious, but a bigger deposit make things much easier. It may help you get a better interest rate on your mortgage, which means you will be paying less for the money you borrow.

At the moment, you will need between 10% and 15% of the purchase price to qualify for the majority of mortgages. It is common for parents and grandparents to contribute towards a first-time buyer’s mortgage - however, some lenders may not accept gifted deposits, or cap the amount that can be gifted, so it is important to bear this in mind.

There are a number of government schemes available to help first-time buyers fill their deposit gap, including Help to Buy, which offers an interest free loan towards the cost of a new build home, and the first home fund, which offers similar support, with lending of up to £25,000, on the open market

An independent mortgage adviser will be able to keep you right on the options available.

5) Find a solicitor who knows your local market

There’s an old saying in the property industry which is that you make your profit when you buy a home, not when you sell.

In essence, this means you need to buy at the right price and not overpay. This is especially true in the current climate amid the unique economic circumstances created by the Covid-19 pandemic.

A local solicitor will have her or his finger on the pulse of what prices are being achieved in your area – and will advise you before making an offer on your behalf.

Aberdein Considine solicitors will not charge a fee to do this - we're here to help you get the right home at the right price.

Should your bid be successful, our legal and mortgage teams will work together to complete your mortgage application, draw down the funds and complete to legal transfer of the property into your name – all under one roof.

Click here if you would like to speak to us about buying your first home.

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