Borrowing / Mortgages

Getting a foothold on the property ladder

Making the leap to owning a property can seem daunting. With so much to consider, including finding the deposit, getting a mortgage, the cost of fees and surveys and understanding the current housing market, so you can see why it’s easy to get overwhelmed.

But by having some knowledge of the market and the process, you’ll be equipped with the tools to help you along the way.

The current housing market

Property prices seem to feature in the news on a daily basis, with headlines warning how difficult it is for first-time buyers to get a mortgage and being able to afford the ever-increasing house prices. But, other forecasts suggest that the steep cost of homes is about to come to an end, with the pressure and demand for properties slowly falling.

Whatever happens with the market, there is some good news for first-time buyers as there are now more mortgage products available, with banks slowly starting to reduce interest rates.

While it remains to be seen what will happen throughout 2023 and beyond, the market is certainly a lot less bleak than it was six months ago.

House deposit

Saving for a deposit can be challenging. As well as calculating what you’d need to put down on a property to be able to buy the house you want, you should also consider the loan to value ratio. This means dividing the amount borrowed by the valuation. The higher the loan to value ratio, the higher rates you’ll likely end up paying as you’ll be considered more of a risk.

As well as saving for your deposit, you might want to think about the schemes that are available to help first-time buyers. These include the First Homes scheme, shared ownership and Lifetime ISAs.

Properties to consider

You should also consider the type of home you wish to buy and weigh up the pros and cons. It’s often thought to be cheaper to buy a property that needs renovating, but high labour and material costs might mean you end up having to pay more than you thought to bring it up to scratch, plus you’ll have the hassle of organising the work.

On the other hand, a new build home is ready to move into and you can add your own stamp with décor and furnishings. However, it might lack the sense of character that an older home has.

While a period home comes with attractive features, you might find it suffers from a variety of expensive issues including, damp, roof or structural problems.

Remember that whatever type of property you choose, a survey is a must have, as it can highlight any potential issues and associated costs to put them right.

Speak to a professional

Finally, if you’re thinking about buying your first home, it’s important to speak to an independent professional financial or mortgage advisor to understand the range of options that are available to you.

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