Anyone hoping to enter the property market for the first time in 2023 faces some daunting challenges, but it is still perfectly possible with the right planning and preparation. Here are a few tips for those who are taking their first steps on the mortgage ladder this year.
Find a good mortgage broker
While mortgage rates are higher than they were this time last year, they are steadily falling, and with the right advice from an experienced mortgage broker, it is possible to find a good deal for you. Some first time home buyers decide to source their own lender, but this can mean that you miss out on the most suitable and best value product.
A good broker will have instant access to thousands of different products and services that would be difficult to source alone. They will also know which lenders are most likely to accept your application, reducing the risk of rejections that can be potentially damaging to your credit score.
Aim to find a stepping stone property
Few people find their ‘forever home’ with their first property purchase. Instead, you might have to lower your expectations and view your first home as a stepping stone that will allow you to take that important first step on the property ladder, rather than a dream place that ticks every single box on your list.
With rental costs rising fast, making a few compromises in the location or size of your home could still prove to be a smarter and more cost effective decision in the long run. You can always reassess your situation a couple of years down the road, when you have more equity under your belt and more experience of the property market.
Consider shared ownership schemes
If you are single or have a lower than average income, then you might assume that home ownership was beyond your means. However, shared ownership schemes can offer an affordable opportunity for first time buyers to get on the property ladder.
The buyer purchases a share of the property, usually around 50%, and pays a proportionate amount of rent alongside the mortgage repayments. Over time, the buyer can ‘step up’ their share in the property, a process known as ‘staircasing.’ The amount of rent payable will correspondingly be reduced.
This is a great option for those with small deposits or other barriers to full home ownership. Shared ownership properties are often incorporated into new-build estates with attractive amenities such as gyms, shops, local nurseries and schools, and open green spaces.
Check your credit score
All lenders will carry out a credit check when considering your application, so it is essential to make sure that you are in good financial shape. If you do have any issues in your credit history, it’s important to disclose them to your mortgage broker, as they will be well placed to advise about the right route forward.
If you are looking for a mortgage broker in Bounds Green, please get in touch today.