With some mortgage rates easing and house prices in parts of the UK edging down, 2024 may be the year for first-time buyers to take that first step onto the property ladder.
To ensure the process is as smooth and cost-effective as possible, making sure the mortgage application is in order, as well as what’s needed at each stage is “essential”, experts at specialists lender Together have said.
To help, Together’s Alan Davison shared five tips to help first-time buyers get their mortgage plans in order ahead in 2024.
There are no ‘silly’ questions
Having never been through the house buying or mortgage application process before, Mr Davison said “it’s natural” that first-time buyers will need more support and guidance than more experienced property purchasers.
He said: “Asking questions to a professional mortgage advisor is always the best route to go to make sure you are as informed as possible before making the jump.”
Organise your documents
When applying for a mortgage with a lender, first-time buyers need to provide certain documents.
Mr Davison explained: “This will include income and employment status, and any existing debts or expenses. Therefore, it’s a good idea to have the necessary documents ready before you start shopping around so you can move quickly and smoothly when the time comes.
“There are lots of online checklists which can help with organising what is needed ahead of time.”
Get professional support
According to Mr Davison, talking to a mortgage broker is a great way to start, as they can help first-time buyers understand the full range of mortgage products available that match their circumstances.
He said: “Unfortunately, many of the lower interest rate mortgage products offered by the high street banks are only available for applicants who neatly fit their criteria, which might not be realistic.”
If this is the case, Mr Davison said: “Brokers will be able to suggest alternative lenders who can help those with irregular incomes, such as self-employed people, or people buying a house deemed non-standard, such as a thatched cottage, for example.”
Don’t let credit history cause problems
Credit scores or history may need some careful addressing before applying for a mortgage as, according to Mr Davison, most mainstream banks are highly dependent on automated lending decisions and are less flexible, which could trigger a rejection.
Mr Davison said: “It’s worth checking credit score in advance of a mortgage application through a company like Experian, to spot unfamiliar items, address them directly with the provider and resolve outstanding debts.
“Possible credit blips need not be the end of homeownership and anyone finding themselves in this position shouldn’t give up hope. They should seek guidance from a mortgage broker who can help understand individuals’ financial circumstances and recommend the best lender.”
Mr Davison added: “Specialist lenders like Together take more of a common-sense approach to lending, looking beyond an individual’s credit score and at their circumstances. Remember, there’s hope beyond blips, and homeownership remains within reach with the right approach.”
There’s no one route onto the ladder
First-time buyers must remember there is a “multitude” of avenues to choose from when hoping to get onto the property ladder sooner.
Mr Davison said: “Shared Ownership mortgages can be a great alternative to allow buyers to purchase a percentage of a property and pay subsidised rent on the part they don’t own, usually to a housing association.”
For example, with some lenders, including Together, Mr Davison said: “You could borrow up to 100 percent of the share within our maximum loan-to-value. First-time buyers would buy a small share of the home now and buy more shares at later stages – known as ‘staircasing’ – usually until homeowners own it outright.”
