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New Year’s Resolutions

New Year's Resolutions

It’s a new year, if you’re thinking of setting yourself a resolution to purchase a property this year then set some financial goals. Getting on the property ladder, or moving up it can be tough, so start early and stick to your savings plan. Here are some ways to ensure you are on the right track to getting a mortgage in place, or securing your future.

Set your end goal

If you’re saving for a deposit it’s a good idea to be realistic. Shop the market and look at properties that suit your needs, once you’ve found a property value you can determine how much deposit you’re likely to need. First-time buyers typically need a 5% deposit of the property value. A rough property value is the best starting point, if you can save more then your repayments will be lower as your LTV will be reduced.

Switch

If you own a property and your mortgage term is due to end it is wise to check your mortgage deal. You can start looking 3 months before it’s due to end as quotes typically last that long. Getting a good deal could tie you in for a few more years, on a better rate. If you don’t switch or find a new deal you could end up on your lenders Standard Variable Rate (STV). Their STV could be quite high, so you might end up paying more than expected. Speak to a mortgage advisor about remortgaging.

Overpay

If you’re in the position to save a little bit more each month then it could be wise to make some over payments on your mortgage. Overpaying has the same impact as shortening the mortgage term, but with the advantage that you can stop doing it if you want too. However, check that your lender won’t add penalties or if there is a maximum that you can over pay in a certain time period.

Check credit & outgoings

If you’re looking for a first-time mortgage, getting your finances and financial history in order is paramount. It’s difficult for prospective homeowners to save nowadays, so figuring out your income and out-goings, and what is really necessary could open up the purse strings and allow you to save an extra sum of money each month. If you have a gym membership, magazine, music or TV subscription, or direct debits for things you don’t use or could do without then cancel them and save the money instead. Checking your credit rating will highlight any issues you have, you may be completely unaware of any blemishes on there.  Knowing your rating will also give you an idea on what type of mortgage and the rates that will be available to you. Try to increase your rating as much as you can by being sensible with your money.

Protect yourself

If you’re getting a mortgage or if you have one it’s wise to protect it. In the case that anything should happen to you, if you have a house, family or debts to cover, then Life Insurance can payout and ensure your finances are dealt with. Often, a lender will require a new home buyer to take out Life Insurance alongside the mortgage. Make sure you shop around and get the best quote at a price that can suit your budget. You can speak to a specialist that can search the top providers for you here.

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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