These days buying your first home can be quite a stumbling block for millenials. There is a lot of pressure regarding getting onto the property ladder, but yet, with inflation and wages not seeming to match, it can be hard now for a lot of people to not only raise the deposit but save and make that plunge into property ownership. There can be quite a few obstacles in the way when it comes to buying a house, even when you are not a first time buyer. So here are some of the common ones everyone can face.
Building up your deposit
Already this has been mentioned, but it is so important to raise the issue that a deposit for a house these days can set people back at least Twenty thousand pounds. That’s an average 10% deposit on a house worth two hundred thousand. Let’s face it, in some parts of the country you can’t even get something for that kind of money. So where does that leave those people? It means continuing to pay high rent prices in the private rental market, and trying to scrape enough together. Some people may have already saved up a lump sum. This is when you could always look into a fixed term deposit which could help you with your savings and to keep them maturing. Leaving your less likely to spend it while you continue to save for the future. It is important to be able to build up that lump sum for the deposit before you can even think about making offers and getting a mortgage.
Working on your credit score
Your credit score can also come into play when it comes to wanting to buy a house, especially because you are heading into the mortgage application process. This is when your every credit application and account can get scrutinised. There is nothing wrong with having a credit card, or bank loans, as long as they are being paid back and payments are not being missed. But you may want to take some time to work out what could be harming your credit score and what you can do to improve it. This is when things like clearing debts, so that your available credit balance is higher than what you owe, or getting into a position where your debts are cleared could work in your favour.
Having the credibility and option of a mortgage
While you may work hard to improve your credit score, and ensure that you save enough for a decent deposit, you still need to be creditworthy for mortgage lenders. That doesn’t mean having a decent history of paying things back, this can also mean consistency in a contract of employment, or accounts from trading under your own business or being self-employed. This can often be looked upon, so ensure that you have some stability and track record before entering into the process.
The increase in property values
Finally, with the increase of property values, this can also prove to be a stumbling block for first time buyers. Sometimes house prices can increase over a matter of months, so what could be affordable now, might not be an option if you are not in a position for another year.
While it may sound negative, the truth is, being aware of these things is in your favour. It means that you can do all you can to ensure you are on your strongest footing to finally get yourself on the property ladder.