With so many options available, financing your first home can be confusing. You’ll want professional help to navigate the market and select your best option.
The market is full of options, whether you’re looking for a first-time buyer’s mortgage, a creative solution or a loan which enables you to buy with your friends.
When you submit a mortgage application, lenders look at a range of criteria. These include all the things you’d suspect such as earnings, outgoings, and deposit. They’ll also look at your credit history and score, and the value of the property you intend to purchase.
Since there are many ways to buy your first home, our 4 first time home buyer finance tips are a superb starting point.
#1 Buy With Friends or Family
How about joining forces with someone close to you? It would help ease the financial burden and could in some cases allow you to afford a larger property. It could also enable you to purchase a property in a better location.
If you do go down this route its best to seek legal advice. A good solicitor will be able to talk you through the options and also how to handle problems should they arise.
#2 Shared Ownership
Some builders and well as most housing associations operate shared ownership schemes. This is where the association/builder owns part of the property and you take out a mortgage on your share.
Each month you pay a mortgage for part of the property you own. As well as paying rent for the part that they own.
Shared ownership makes home ownership more affordable. You might buy a 25%, 50% or 75% share in your home. You are able to purchase another chunk of the house whenever you are ready.
If you want, you can keep buying more shares until you own your own home outright.
#3 Government Schemes
The local government may operate several schemes to help people with property purchases. This help may including low-cost home ownership and cash incentive schemes.
However, these are often available in limited areas and to certain professionals such as nurses, teachers and first-time buyers. The current flagship scheme is Help To Buy and is available nationwide.
#4 Guarantor Mortgages
If your salary isn’t big enough to cover the mortgage, then you may be able to get a close family member or friend to act as a guarantor. Even if this is a short term measure.
This could be a cost-effective way to get on the property ladder and know you are safe should anything go wrong. It might also be an option if you have had a less than perfect credit history as you reduce the likely chances you will default.
A guarantor is someone who is willing to guarantee your mortgage payments. Your guarantor doesn’t have to pay out any money unless there is a situation where you fail to make your repayments then they are liable to pay for you.
With all of these options, you will need to seek out the appropriate advice and also spend time reading up on how to finance your first home.
In addition to researching, you will have to spend some time playing with numbers and figuring out if buying is affordable for you.
So there you have 4 first time home buyer finance tips. Each will enable you to make your dream of home ownership possible. Start today and keep working hard!