The RISE in real estate prices makes it more difficult than ever for first-time buyers to access the scale.
But mortgage broker Carmen Green has these tips for future homeowners.
Carmen, 26, is a mortgage consultant with Surrey-based mortgage brokerage Xpress.
She started working at the brokerage at the age of 18, “when I had no idea what a mortgage was”, but quickly trained and qualified for her role. current.
Carmen says the most common worry for first-time buyers is their spending.
She said: “The question I get asked most often is, ‘do I have to stop spending money to make my bank statements look healthy?
“I advise clients to take a look at their bank statements and consider whether they are about to lend hundreds of thousands of pounds.
“What could you worry about? Does the person gamble, regularly overdraw or spend every penny every month without a tampon? ”
“It’s a window into someone’s spending habits.
But that doesn’t mean buyers have to limit all their spending to get a mortgage, adds Carmen.
Instead, she says it’s important to show that you’re in control of your finances and that you’re not living beyond your means.
So there is no need to panic just because you have a holiday book or splurged on a big birthday present as this is the big picture and not a single purchase.
Along with common questions like this, Carmen gets some more unusual ones as well.
She adds: “I recently asked a client to send me a picture of a pile of euros under his bed and ask if that was proper proof of deposit.
“Turns out there was a very valid reason they had this stash of money, but it wasn’t easy to get it through money laundering and compliance checks!” “
Another customer was reluctant to hand in his bank statements.
“Without going into detail, I would say you have to be careful with what you call money transfers to your friends – because not all mortgage underwriters will share your sense of humor,” Carmen said.
So with that in mind, here are her top four tips for first-time buyers:
Establish a budget
Budgeting is one of the first things any aspiring buyer should do – this couple set a rule of £ 50 per week.
And it’s not just about how much real estate you can afford.
Don’t forget to factor in all the extras like attorney fees, stamp duties, moving costs, and even the cost of furnishing your home.
Carmen said, “Once you’ve calculated the purchase costs, you can calculate how much down payment you can put down and how much you can afford on monthly mortgage payments.”
And don’t forget to take into account any changes in your situation: are you planning to change jobs, have a baby or see your travel costs increase, for example?
All of this will affect what you can afford to pay off each month – and how much you can borrow.
Check your credit report
Your credit score is one of the things any lender will look at when deciding whether or not to grant you a mortgage.
This means that you need to make sure it is in as good condition as possible.
Any bad credit recorded against you, such as missed or late payments, defaults, or county court judgments, will be reported to a lender.
You can perform a free “soft check” or your credit report through credit bureaus such as Experian and Equifax.
This will help you understand how good your credit profile is and also allow you to spot if it has any errors.
A mortgage advisor can help you navigate the file if you’re not sure what to look for, as well as give you tips on how to improve it.
“It’s not uncommon for an incorrect missed or late payment to appear on your file, which has a negative impact.
Sort your documents
Buying a property means A LOT of administration, so it makes sense to keep all of your paperwork up to date and in place.
You will need all identification documents such as a driver’s license or passport, payslips, p60, bank statements and all recent accounts if you are self-employed.
Make sure everything is registered at the correct address and that any ID is still valid.
Having all of this on hand before you start the process can make it a lot less stressful.
“As a mortgage broker, that also means I can do my research and give more specific advice as well,” Carmen said.
Choose your location
The saying “location, location, location” exists for a reason: it is important to choose where to live.
Once you have decided on an area in which to conduct your property search, you will need to research real estate prices and see what you can afford.
Carmen said: “You may not be able to afford the four bed house that you saw on Zoopla and fell in love with.
“Ask yourself if you’d rather look somewhere different to buy a house of a similar size, or stay in the same area and get something slightly smaller? ”
It is also important to think about how long you plan to stay in a property or if you will need more space in the future, for example.
There are home buying programs that could help you buy a home in your primary neighborhood, such as shared ownership programs, so they may also be worth investigating.
Many of our first-time buyers at My First Home have used these programs to move up the ranks.
Carmen said: “Being able to share the enthusiasm a client feels about buying their first home or a new home is the best thing about my job – it never gets old.
“And if I can save clients thousands of dollars by getting them a good mortgage deal or remortgage, that also does me good because a lot of people often don’t realize how much they can save.”
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