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Tuesday 5 January 2021
Tuesday 5 January 2021
Tuesday 5 January 2021
Tuesday 5 January 2021
Buying your first home is a significant milestone, but it can also be an intimidating process. With so much conflicting advice available, it’s crucial to have guidance tailored to your personal circumstances. Our advisors are here to provide the best and most accurate advice to help you navigate this exciting journey. Planning ahead and preparing thoroughly can give you a distinct advantage when it comes to securing the home of your dreams.
The Importance of a Larger Deposit
One of the most important steps in preparing to buy a home is saving as large a deposit as possible. A deposit serves as protection for lenders, reducing their risk when assessing your mortgage application. Lenders consider potential challenges borrowers may face, such as periods of unemployment or reduced disposable income, particularly if you start a family.
A larger deposit offers several benefits:
Lower monthly repayments – With a smaller loan, your repayments will be more affordable.
Increased mortgage approval likelihood – Lenders are more likely to approve applications with larger deposits due to reduced exposure to risks.
Budgeting for Moving Costs
In addition to your deposit, it’s essential to budget for other costs associated with buying a home, such as:
Stamp duty – Depending on the property’s value, this tax may apply.
Solicitors' and surveyors' fees – These are necessary for legal paperwork and property assessments.
Moving and furnishing expenses – The cost of moving and furnishing your new home can vary.
Setting aside funds for unforeseen expenses, such as unexpected repairs or additional household items, can also help avoid financial stress once you move in.
Government Help-to-Buy Schemes
You may be eligible for government schemes designed to help first-time buyers. For instance:
Help-to-Buy Equity Loan – If you can put down a deposit of at least 5%, the government may lend up to 20% of the property’s value (40% in London). This allows you to secure a mortgage for the remaining 75%.
Mortgage Guarantee Scheme – This scheme helps buyers of both new-build and pre-owned properties. It enables lenders to insure part of the mortgage with the government, reducing their risk.
While these schemes can be beneficial, it’s important to note that they may not suit everyone. Rules and limits apply, so be sure to explore whether these options are right for your situation.
Family Support and Guarantor Mortgages
Family members can also play a role in helping you secure a mortgage. Older relatives with greater financial resources may act as guarantors, providing additional security to lenders. This option is especially helpful if:
You struggle to meet affordability criteria.
You have a less-than-perfect credit history.
Mortgages for the Self-Employed
If you’re self-employed, don’t assume you’re ineligible for a mortgage. Lenders are familiar with the unique challenges faced by self-employed individuals and have processes to assess your borrowing potential. Typically, lenders will require:
Evidence of income over the last two or three tax years, averaged or based on the most recent year.
In some cases, lenders may accept just one year’s accounts if your financial profile is strong.
Self-employed individuals with a solid financial history can secure competitive mortgage deals, so don’t hesitate to explore your options.
Get Expert Guidance Today
Buying a home is a major investment, and having the right advice can make all the difference. Whether you’re navigating deposit requirements, exploring government schemes, or seeking options as a self-employed buyer, we’re here to help.
Contact us today to learn more about how we can assist you in making your homeownership dreams a reality!
Buying your first home is a significant milestone, but it can also be an intimidating process. With so much conflicting advice available, it’s crucial to have guidance tailored to your personal circumstances. Our advisors are here to provide the best and most accurate advice to help you navigate this exciting journey. Planning ahead and preparing thoroughly can give you a distinct advantage when it comes to securing the home of your dreams.
The Importance of a Larger Deposit
One of the most important steps in preparing to buy a home is saving as large a deposit as possible. A deposit serves as protection for lenders, reducing their risk when assessing your mortgage application. Lenders consider potential challenges borrowers may face, such as periods of unemployment or reduced disposable income, particularly if you start a family.
A larger deposit offers several benefits:
Lower monthly repayments – With a smaller loan, your repayments will be more affordable.
Increased mortgage approval likelihood – Lenders are more likely to approve applications with larger deposits due to reduced exposure to risks.
Budgeting for Moving Costs
In addition to your deposit, it’s essential to budget for other costs associated with buying a home, such as:
Stamp duty – Depending on the property’s value, this tax may apply.
Solicitors' and surveyors' fees – These are necessary for legal paperwork and property assessments.
Moving and furnishing expenses – The cost of moving and furnishing your new home can vary.
Setting aside funds for unforeseen expenses, such as unexpected repairs or additional household items, can also help avoid financial stress once you move in.
Government Help-to-Buy Schemes
You may be eligible for government schemes designed to help first-time buyers. For instance:
Help-to-Buy Equity Loan – If you can put down a deposit of at least 5%, the government may lend up to 20% of the property’s value (40% in London). This allows you to secure a mortgage for the remaining 75%.
Mortgage Guarantee Scheme – This scheme helps buyers of both new-build and pre-owned properties. It enables lenders to insure part of the mortgage with the government, reducing their risk.
While these schemes can be beneficial, it’s important to note that they may not suit everyone. Rules and limits apply, so be sure to explore whether these options are right for your situation.
Family Support and Guarantor Mortgages
Family members can also play a role in helping you secure a mortgage. Older relatives with greater financial resources may act as guarantors, providing additional security to lenders. This option is especially helpful if:
You struggle to meet affordability criteria.
You have a less-than-perfect credit history.
Mortgages for the Self-Employed
If you’re self-employed, don’t assume you’re ineligible for a mortgage. Lenders are familiar with the unique challenges faced by self-employed individuals and have processes to assess your borrowing potential. Typically, lenders will require:
Evidence of income over the last two or three tax years, averaged or based on the most recent year.
In some cases, lenders may accept just one year’s accounts if your financial profile is strong.
Self-employed individuals with a solid financial history can secure competitive mortgage deals, so don’t hesitate to explore your options.
Get Expert Guidance Today
Buying a home is a major investment, and having the right advice can make all the difference. Whether you’re navigating deposit requirements, exploring government schemes, or seeking options as a self-employed buyer, we’re here to help.
Contact us today to learn more about how we can assist you in making your homeownership dreams a reality!
