First-time buyers –
how to avoid purchasing a property for more than you can afford
not just getting on the property ladder that’s a struggle for many. In fact,
once buyers have managed to get their name on the land registry with their
first home, many are unable to afford the mortgage payments and utility bills
required to run their homes. A study has found that 45% of consumers who use a
payday loan service are using it as an alternative method to fund their home;
with one in fifty using loans to cover their rent payment – before they have
even got onto the property market. In 2016, it was reported by Halifax that the
intergenerational wealth divide had risen by 10%, meaning that those who are
born after 1985 were going to find it 10% harder to purchase a property.
what homebuyers should be considering when buying a home:
average house deposit required for a house (including stamp duty, valuation,
survey fees and conveyancing cost) is estimated to be £22,689. With the mortgage
deposit often between 10% to 20% of the property value.
it is the additional legal fees which many often fail to consider when it comes
to parting ways with their deposit and paying for other associated costs.
credit score -The
higher the credit rating, the lower the mortgage interest and the better
mortgage products a buyer can access. If a score is lower, than buyers may find
that they aren’t being offered the best product.
finances - Many
lenders will ‘stress test’ a buyer’s finances to see if they will still be able
to afford the mortgage if the Bank of England base rate increases to 3% above
their current level over the first five years of the loan or their personal
finances change. However, while banks carry out this check, buyers should also
be taking stock of their finances to ensure that they feel they can comfortably
afford to live in the property.
more help and advice, contact Mark Scott at Positive Impact Finance Solutions
today on 01733 306470.