Many millennials are opting out of buying their own homes because they believe it’s too difficult to get a mortgage. It’s true that getting on the property ladder these days is far more difficult than it used to be, but it doesn’t have to be impossible. So, if you’re yearning for your own home but you think getting a mortgage could be too difficult, here are some tips for boosting your chances.
Take Care of Your Credit Score
When it comes to finding the perfect mortgage for you, taking care of your credit score is important. Register with a credit score provider, like Experian, and keep an eye on your score over the next six months. You’ll learn what affects your score and how to keep your score high. You can also make comments on any negative points on your score, which shows lenders you’re aware of what your report says and how to better manage your finances in the future. Your credit score is one of the first things a lender will look at.
Create a Budget
Buying a house isn’t cheap, and you’ll likely need money up front before a mortgage is even considered. Most lenders ask for at least 10% of the house value as a deposit, which means most first-time buyers have to spend a while saving before they’re in the position to buy. You can create a budget for this by cutting down on things you don’t really need. The extra money you save you can be put towards your deposit. It’s also sensible to think about how much you can realistically afford to spend on a mortgage each month. Your financial advisor can help you with this, but it’s important to remember that mortgage rates can vary and change over the years. This means that you could be paying more after an initial fixed rate period.
Stay in the Same Job
Many mortgage brokers, like Altrua Financial, will advise you to stay in the same job for as long as possible. The advantage of being a millennial is that you don’t have to stay in the same job for years and years, like the generations before did. Many of us will have up to five different careers in a lifetime. However, when it comes to getting a good mortgage, lenders like to see that you’ve been with the same employer for a significant amount of time. It’s reassurance that you aren’t likely to lose your income anytime soon.
Clear Your Debts
It’s often very difficult to clear debts, along with saving for a mortgage deposit at the same time. But, if you’re able to, you’ll look far more attractive to a lender if you can pay off at least a portion of your debt. It not only means you look responsible to your lender, but it also means you’ll be able to borrow more when it comes to calculating your mortgage.
Create a plan of action, and give yourself some time to prepare before applying for your perfect mortgage.