Firstly, a big congratulations on the start of your property journey – exciting times!

Looking into purchasing your first property can be somewhat daunting. With many years’ experience under our belt, we thought it would be useful to share common hurdles and how best to approach them to improve your chances of securing your mortgage…

1)    Deposit

Start saving and adding to your deposit as early as possible. Typically, the bigger your deposit, the better rates will be available to you. 5% of the property price is a good aim. Be aware that there are other fees that will potentially need paying on top of your deposit, examples of these are listed below.

 2)    Affordability

It is vital that you know your budget. You need to know what you can realistically afford to borrow and how that interprets into monthly costs. Completing an affordability check with your mortgage broker will provide you with all the necessary information, including a mortgage illustration.

 3)    Credit File

Unfortunately, this is something that is often forgotten in the lead up to the decision to purchase a property and can potentially become a setback. The cleaner your report and the better your score will generally mean the better the mortgage rate you’ll be offered. A few tips on getting and keeping a good score are;

• Set up Direct Debits for credit payments - Missed payments and defaults have a significant, negative impact on your score.
• Register on the Electoral Roll - Proving where you live is a quick, simple way of improving your score. You can do this even if you’re living with parents.
• Don’t max out your credit cards - It works in your favour to have, and reliably use, forms of credit. However, your credit utilisation needs to remain reasonably low to be deemed favourable. If possible, try to keep your credit utilisation to 25% (i.e. if you have a limit of £1000, try to only use £250).
• Check financial associations and any other errors – We’ve known errors on credit reports to cause problems in obtaining mortgages. If you find these early on then you’ll have a good chance at resolving these issues prior to any mortgage application.

If you find yourself in a position of wanting a mortgage but your credit report/score is poor, we may still be able to help. To read more about mortgages with adverse credit, please click here.

 4)    Required Documents check

Again, this is something that can quite easily be overlooked and has the potential to cause delays. A few things to make sure are all in order before applying for a mortgage are;

• ID documents in date – passport, driving license.
• Bank Statements – lenders often request your last 3 months statements. Make sure your correct address shows on statements (easy to forget to update addresses when a lot of statements are paperless nowadays), nothing questionable on your statements (be mindful of activities such as gambling).
• Payslips – these will need to correspond with your bank statements.
• Self-employed – SA302s and Tax Year Overviews will need to correspond, preferably 3 years’ worth however there may be options available if you have less than this.

 5)    Obtain Decision in Principle

Getting a Decision in Principle before looking for properties will mean that, when the time comes to make an offer, you’ll be in a position to prove to vendors/ estate agents that a mortgage lender has pre-approved you, making you a favourable buyer.

 6)    Limit new credit applications

If you know you’re going to be applying for a mortgage imminently, now is not the wisest time to go looking for a new car on finance. Decisions like that will have a significant effect on a lender’s evaluation of your affordability and how much they would be happy to lend you.

 7) Other Fees   

It's important to account for other fees when you're saving for your deposit to avoid any nasty surprises of unexpected costs. Fees to consider are as follows;

• Solicitor’s fees: Fees will vary case by case and will normally be dependent on the purchase price. As a first time buyer you can expect to pay £500-£1000.
• Valuation fees: Many lenders will offer free valuations for first time buyers. If they don't, it will again be based on the purchase price.
• Product fees: Some mortgage products come with a fee, on average £999. These fees can either be added to the loan amount or be paid upfront.
• Mortgage broker fees: Our broker fee is fixed for first time buyers at £495.