Most people strive to own a home of their own at some point in their lives. It is a place that offers security and somewhere to raise a family. It is normal to move up the housing ladder to ever better homes as the years pass. Money invested in bricks and mortar is usually inflation proof too. There are few other investments available to the average person that can boast such a guarantee.
To the first-time buyer, the thought of taking on a complicated debt can lead to many sleepless nights. Nevertheless, they try to find one to suit them and their finances. Since the financial crash that first reared its ugly head when the Lehman Brothers collapsed in 2008. Banks and the government have imposed strict qualification criteria for lending. That presents a problem for first-time buyers.
If you are about to start down that road, here are some things you can do to ensure you get a mortgage.
Check Your Credit Reference files
Many of your financial agreements are on file with credit reference agencies. There are three big players in the business; Callcredit, Experian, and Equifax. Any company or institution that lend you money or enters into a contract with you will record your repayment history there. It will detail, for example, credit card balances and monthly repayments. People can see if you have ever missed or made a late payment and whether a company has issued a default against you. When you apply for a mortgage, the lenders will look at your credit history. many people fall at this first fence.
The good news is that most problems with your credit history fall off the files after six years. But if you have ever declared bankruptcy, you will probably have to admit to it for the rest of your life. There is nothing you can do to get rid of a default except wait until it drops off your file. Be diligent with your finances until your credit history is clear, and you will have more success in your mortgage application.
Stay Within Your Limits
Choose a home from the estate agents in Coventry that you can afford. The banks might think you are irresponsible if you attempt to buy a property that is clearly out of your price range.
Deposit
If you can raise a sizeable deposit to put down on a home, there will be equity in it. Therefore, the banks will be more inclined to loan you the rest. If you do not meet the repayments as you should, they will repossess the home and get their money back. Do not borrow money to pay a deposit; they will find out. If your parents should give you the money, the banks will ask them to state that it is a gift in writing.
There is a Help to Buy Scheme that helps buyers to raise a suitable deposit; do your research.
Increase Your Earnings
Work longer hours or get a second job or do some self-employed work to elevate your income. You must appear to be a safe bet to the lenders.
You would have stood a better chance at getting a mortgage before the new qualification rules came about. All is not lost; when the market slows they will relax the rules again. Just wait it out and never give up on your dream.
