Over the past year, I’ve really started to think about saving for a house. It’s a big step and it’s not one that I ever thought I’d be bothered about. I always thought that I’d be happy renting somewhere. However, since spending a lot of time at home during lockdown, I’ve realised that I’d like a place that I can call my own. I am still a long way off being able to buy a house, but I’ve started saving. Here are some things that you need to consider when you are getting a mortgage.
Having a poor credit rating will make it really hard for you to get a mortgage. My credit score used to be shocking, but over the last year I have been working hard to pay off my debts and make sure all of my payments are on time. I even got a new credit card so that I can slowly build up my credit score.
Essentially, a mortgage is a huge debt. Before you apply for one, you should make sure you have paid off any existing debts. Having an active credit card is fine, but try to make sure you are paying it off in full each month. Try not to go into your overdraft if you can – mortgage lenders want to see that you are good with your money. A mortgage advisor and broker will be able to help you out and give you advice.
Saving a deposit
Saving a deposit is really important – the bigger the deposit, the less you have to borrow. It’s a good idea to ensure that your monthly mortgage payments are as low as possible, so putting down a bigger deposit will help. Save as much as you can because you will also need a couple of grand for solicitors fees! Set yourself targets either weekly or monthly to keep yourself motivated. I always set myself a savings goal each month and it is never the same amount. Some months I will set a goal of £150, others it might be as high as £500 – it all depends on my work and outgoings. Having a small monthly goal puts less pressure on saving. I have a few different ways in which I make money online at the moment.
Speak to a mortgage advisor and listen to the advice that they give to you. You’re not going to be able to afford a £1.2m house when you’re a single person on a £25k salary and have £15k in the bank. You need to be realistic when you are thinking about the type of properties you want to buy and how much you need to save. You also need to think about the money that you are going to spend on the house once you’ve bought it. Will you need to redecorate the kitchen? Will you need new carpets? What sort of condition is the garden in? Make sure you plan for these things too!