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Could you become a first time buyer in 2020?

Mortgage rates

Whilst there is likely to be some uncertainty over the housing market with Brexit in 2020, there was some good news for first time buyers.  With a majority conservative government formed, they can bring stability to the economy and forge ahead with plans to help first time buyers take their first steps onto the property ladder.

However, although the current climate looks good for first time buyers in 2020, you’ll still need to do your own preparation if you are hoping to move in the new year.

Review your spending

Buying a home is a huge commitment so you’ll want to make sure you’ve got a good understanding of your own finances.  Knowing the ins and outs of your income and expenditure will help to establish a budget, and could help you to obtain a good mortgage deal.

When applying for a mortgage your lender will take your income into consideration, but to make sure you can realistically afford the repayments, they’ll want to know about any committed expenditure.  This includes such things as credit card repayments, car finance, childcare etc. Try to keep other spending to a limit in the lead up to your mortgage application – a healthy bank balance showing a large portion of disposable income may help you to secure a better mortgage.

Keep chipping away at that deposit

There was a small handful of lenders that re-introduced 100% mortgages in 2019, however the vast majority of deals will expect a down payment.  Whilst a small deposit could still secure a deal, a larger deposit is likely to secure you a better one.

We know it’s not easy saving for a deposit so try to maximise your savings as much as you can.  Do your research and try to find high-interest savings accounts which will give you a good return on your money.   ISAs are generally a good place to start.

Clean up your credit score

To give yourself the best chance of becoming a first time buyer in 2020, one of the wisest things you could do would be to check your credit report.  Lenders use this to check if you are a responsible borrower and whether you’ve had any money problems in the past.

You can request to see your report at any time.  This will give you advance warning of what your lender will see.  Check it closely for any errors as these can be rectified. If your credit score is lower than expected, don’t worry, this can be improved.  Try to pay off any outstanding debt. This will help. It can be hard while trying to meet your savings goal, but if you’re hoping to secure a good mortgage deal in 2020 then you’ll need to make sure your credit report is as squeaky clean as can be.

Prepare your paperwork

As a first time buyer it’s imperative to move quickly, particularly if you want to secure your dream house.  Having all your paperwork in order will help you to move through the process more quickly. Here’s a checklist of the things you’ll need:

– Bank Statements/payslips
– Passport/Identity Documents
– Proof of address
– If you’re self employed, you’ll need to provide 12-24 months worth of accounts to prove your income
Speak with a mortgage broker

The property market can be a bit of a maze for first-time buyers.  Using the services of a mortgage broker could help tremendously. Using their expert knowledge they can guide you through the ins and outs of the mortgage market, and help you to find the best deal for your circumstances.  With so much to think about when buying a new home, a mortgage broker can help to take some of the pressure off, so you can concentrate on saving your money and finding the right home.

If becoming a first-time buyer in 2020 is on your to-do-list for the new year, then why not give SoSmart Money a call.  Experts in the mortgage market, they can find you the right deal to help you into your first home.

The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Money.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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