When it comes to planning for the future, owning your own home is often the ultimate goal for many of us. However, with house prices so high and with many people struggling to get a mortgage, home ownership may seem completely out of reach. This is particularly true for younger people, who are finding it nearly impossible to get on the housing ladder and often don’t see the same benefits that their parents received. With this in mind, what are some top tips for anyone hoping to get a mortgage and fulfil their dream of owning their own home.
Save, Save, Save
Often, one of the major hurdles for those who are trying to get a mortgage is scraping together the deposit. This isn’t surprising considering that in 2022, the average first-time buyer deposit in the UK was a whopping £62,500. For the majority of people, it’s unfeasible to save this amount of money, especially during the cost-of-living crisis. Therefore, saving needs to start early, the earlier the better. Don’t wait until you’re ready to start climbing the property ladder, as you may be waiting far longer than you expect.
Those who are serious about saving for their future may need to make significant cutbacks to their spending habits. However, it’s worth keeping in mind that sacrifices made in the present will help you to reach your goal of owning your own home.
ISA
When saving, there are ways in which you can make your money go further- one such method is the use of ISAs. Unfortunately, the help to buy ISA is no longer available for new applicants but is still working for those who previously applied. This ISA allows users to save for a mortgage and the government will top up your savings by 25% (up to £3,000) when it’s time to buy your first home. Therefore, those who were lucky enough to apply to this scheme should continue to pay in, in order to receive the benefits.
Fortunately, there are other ISAs which are still available and can help those who are saving for a mortgage. The lifetime ISA allows users to save towards their future, including retirement or purchasing your first home. Participants must be between the ages of 18 and 40 in order to open a lifetime ISA. You’re able to save up to £4,000 each year and the government will add an additional 25% to your ISA, up to £1,000 per year.
Credit
Another major issue when trying to acquire a mortgage is your credit score. Most lenders will only provide a mortgage to those with a good credit history and unfortunately, not everyone has this. However, there are changes you can make in order to improve your credit score and therefore improve your chances of getting a mortgage.
For those trying to build their credit score- you can do this by applying for a credit card and making regular payments, on time and in full. This will slowly build your credit history and bump up your score. For those with bad credit, it can be more difficult to tackle the problem, but not impossible. You need to ensure you pay off any outstanding debts, avoid late payments and reduce the amount of credit you have. Sometimes, you just need to be patient, make sensible decisions and eventually your credit score will improve.
Get Help
You can receive expert help from mortgage advisors, who can provide invaluable advice for anyone looking to get on the property ladder. They can help to make the overall process quicker, easier and less stressful. This can be particularly useful those who are first-time buyers.
When it comes to applying for a mortgage, all of your financials are relevant- including tax. U-Deliver offer expert financial advice and services, aimed at those who drive for a living. Don’t hesitate to visit their website for further information on everything they have to offer.
