Your first home will be one of the most expensive and momentous purchases you ever make, so it pays to ensure that you’re making the right decision. Many people are so eager to get their foot on the property ladder that they let their head rule their heart, jump on before they’re ready, and end up in an unceremonious slide back down to the bottom.
The best way to avoid making such a mistake is to think carefully before you buy. Here are just a few of the questions that you ought to be asking yourself…
Are You in a Stable Job?
When it comes to finding a suitable mortgage, you’re not only assessing mortgage lenders, they’re also assessing you. One of the main criteria that providers will use to judge your suitability is proof of income, and this will heavily impact their decision on whether or not to lend you the capital you require. If you haven’t been employed for at least six months in a permanent role most lenders will reject you outright, so you might find it better to wait a while before making any applications. Equally, if you’re self-employed, many providers will automatically deem you unsuitable, and although not impossible, you’ll find getting a mortgage much more difficult than the average applicant.
Do You Have a Good Credit History?
Another criteria that lenders will use to evaluate you is your credit history. This can be problematic not only for those with debts, but also for those with no credit history at all. If you find yourself amongst them, it may be a good idea to wait before making a mortgage application. In the meantime, try to build a positive credit portfolio by taking out a credit card and paying the balance in full and on time each month for at least six months.
Have You Saved a Substantial Deposit?
Some mortgage lenders will lend you credit even if your deposit is only large enough to cover 5 per cent of the purchase price of your property. This reality means that many first time buyers try to step onto the ladder prematurely. Although it can be tempting to make the leap as soon as you’re able, bear in mind that the larger the deposit you save, the better the deals that will become available to you.
Can You Afford Repayments?
Even if a mortgage provider determines that you can afford repayments, it’s always a good idea to do some calculations yourself. Mortgage rates are set to rise in the near future, and those who can afford to make repayments now may find that they won’t be able to do so come 2016. If a rate rise would leave you struggling, take our advice and wait a little longer.
If, however, you’ve answered ‘yes’ to all of these questions, then it’s time to get your foot on the property ladder – all that’s left to do is go out there and find the home of your dreams.