It can be exceptionally hard to get on the property ladder for the first time. Today there is a cost of living crisis in many of the developed countries around the world coupled with increasing levels of inflation. While older generations may have found it straightforward to get a first mortgage once they had secured meaningful employment, the same cannot be said for today’s generations.
It is important to remember that securing a first mortgage and moving away from renting properties is a vital step in life that allows you to build a secure financial future. Put simply, renting accommodation should only be seen as a short-term solution until circumstances allow a mortgage to be secured. This article offers advice to help make getting on the property ladder a little easier.
Start saving now
It is a fact that you will need to put a deposit down on a property to secure a mortgage. Typically this will be a minimum of 5% for the total value of the property. For instance, a $200,000 home will require a deposit of $10,000. In addition, there may be associated fees such as land registry charges, conveyancing, and valuing the property. It is imperative to start saving early for the deposit on your first home. Today’s world tends to be characterized by a consumer culture where people are comfortable with the idea of buying on credit or taking out loans on larger purchases. It can be highly beneficial to shed this ideology and to cut back on luxury or non-essential purchases to start saving meaningful amounts of money. In short, buy the essentials that you need and cut back on items you can comfortably live without to enable you to save more effectively.
Advice for medical professionals
If you work as a medical professional, you may have already experienced difficulties in securing a mortgage on your first home. This is because conventional lending institutions such as banks may find it difficult to accurately assess levels of remuneration due to the banding system of pay for doctors. This can lead to misinterpretation of total salary figures and lower values being calculated. In addition, a doctor’s employment contract can be interpreted as temporary work, which leads to delays or unsuccessful applications. If you are a trainee doctor, it makes sense to investigate a fixed rate mortgage for trainee doctor from specialist lenders who have experience in securing mortgages for medical professionals.
Understand your credit score
As a final point, it is imperative to fully investigate and understand your credit score. There are a range of sites online that can provide an accurate representation of your credit rating. This is important as lenders will check this score as part of assessing your suitability for a mortgage. To improve your credit score, it is important to settle all existing debts quickly and within agreed timeframes. In the six months prior to searching for a mortgage deal, ensure that all repayments are on time and minimize the number of payments coming out of your bank account.
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