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Mortgages » First Time Buyers
Buying a home for the first time is extremely stressful. We're here to help reduce the stress and help you to understand the process and avoid the pitfalls
Tips to getting the home of your dreams
1. Plan ahead
2. Get a credit report to see how you rate in the eyes of financial institutions
3. Are you on the electoral roll?
4. Do you have a bank account?
5. Do you have a credit card?
6. Have you ever been declined credit?
7. Do you have debts?
8. Do you have a deposit? The larger your deposit the greater the options you will have available
9. Have you worked out a budget?
Remember there is more to home ownership than mortgage payments.
Main purchasing costs:
Solicitors fees; Stamp duty for properties over £125000; Moving costs; emergency repairs; furnishing.
Running costs to consider:
Council Tax; Buildings and contents insurance; gas; electricity; water rates; telephone; internet.
Understanding affordability
Lenders will take into consideration all your existing commitments when calculating how much they are prepared to lend you.
They annualise existing commitments and subtract this amount from your gross annual salary before applying an income multiple.
Example
John earns £25000 and wants to borrow £100000. His car loan is £250 per month. The lender he has approached has told him that he can only borrow £88000 – this is because his annual commitment of £3000 (£250 times 12) is subtracted from his annual salary leaving £22000.
This multiplied by the lenders generous multiple of 4 is £88000. ( please note that lenders have varying criteria so there is no hard and fast rule as to how much you can borrow. The trend is generally towards affordability, which is in our opinion the best way of ensuring that you do not lose the house of your dreams)
There are several websites available where you can obtain a credit report. The main ones to consider are:
This site offers one free credit report per year. You have to register on their site and in exchange for one credit report per you you must agree to receiving one e-mail month from them. The site is owned by Credit Reporting Agency Limited. Please note that by clicking on the link you will be taken to an external site and we are not responsible for its content
Experian is a well established credit referencing agency and offers a free 30 day trial where you can have access to your credit report for a month. Their aim with this free trial is to get you to subcribe to their annual service which costs £6.99 per month. This is not very clearly stipulated on the initial application form and when you apply for your free trial you have to use a credit card. If you decide to cancel your subcription you have to write to your credit card company to cancel. All in all a lot of bother.
You can order a £2 paper copy of your Experian credit report online This contains all the public and private information recorded in your name and available to lenders carrying out a credit check through Experian. Please note that by clicking on the link you will be taken to an external site and we are not responsible for its content
Equifax do not offer free reports but offers three types of service: a credit report at £11.95, a credit rating combined with a credit report at £14.95 and a Identity watch service at a subscription of £3.99 per month. Please note that by clicking on the link you will be taken to an external site and we are not responsible for its content
Please call us on 0845 009 0064 for an initial no obligations discussion. Alternatively please fill in the enquiry form on our contact us page and we will call you at the time you specify