First-time buyer mortgages

Planning to buy for the first time in 2021?

October 21, 2021
Information published was correct at the time of writing


There is a wealth of information to take in when buying your first home, and in the current market, lenders are far stricter with lending criteria for first-time buyers. Most people dream of owning their own home, and usually, getting a mortgage is the only way to do it.

Getting onto the property ladder should be one of the most exciting things you’ll do but there is so much to think about, including finding the right mortgage.

Help To Buy Scheme
The Government’s current Help to Buy scheme in England will end in March 2021 and a new one, just for first-time buyers, will start on 1 April 2021. Still, with just a 5% deposit and a 75% mortgage, first-time buyers may be able to borrow up to 20% of the cost of a new home from the Government, or 40% in London. The amount you can spend on your home will depend on where in England you’re looking to buy.

Tips to Boost your Borrowing Power
If you’re planning to buy for the first time in 2021, it’s important that you’ve got your finances in order. It’s not just your income and deposit being scrutinised when taking out a mortgage avoid emergency loans. And try not to apply for credit either – like a new credit card, or a mobile phone or car loan.

Start Spending Sensibly
It also helps to prove that you can live on a budget and you know what your outgoings are. Start to track what you’re spending monthly on essentials, bills, loan repayments, and any other financial commitments. Then you’ll be able to prove you know your finances inside out when you get to your mortgage interview.

Stay in Your Job
Lenders are often put off if you’ve been in your job for a very short period (six months or less). So, if you’re planning to buy a house, don’t think about switching careers at the same time. You can do that after you’ve secured the mortgage and moved in.

Top Up Your Deposit
Most lenders typically require you to have a deposit of at least 5% of the value of the property you intend to buy, but 10% is even better. Lenders offer better rates the bigger your deposit is, and they usually improve at certain levels (so, if you have a 9% deposit saved, it’s definitely worth trying to break that 10% barrier).

Check Your Credit Score
You can get your report from a credit reference agency, like Experian, for £2, or free from ClearScore. Occasionally they have errors, or you’ll see that your credit is still linked to an ex-partner or ex-housemate, which is affecting your score. You want all these problems corrected before you start a mortgage application.

Get On The Electoral Roll
You might not know it, but if you’re not registered to vote, or you’re still registered at an old address, it can affect your chances of getting a mortgage. Banks and lenders use the electoral roll for basic identity checks, so make sure your details are up to date.
If you’ve followed all of these recommendations, all that’s left to do is to get your paperwork together and put in your application. You could soon be on your way to the home of your dreams. .

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