Seven points for first time buyers to consider when funding your new home

The majority of first-time buyers will need some sort of funding to assist with their purchase. The most common way is to take out a mortgage. Essentially, a mortgage is much the same as any other type of borrowing with the main difference being that the loan is secured against your property. What this means is that the lender has the legal right to take action against you (including repossession of the property) if you fail to keep up your mortgage repayments.

When applying for a mortgage, it is essential that your credit score in order. When lenders receive a mortgage application, they will look at your credit history as part of their decision-making process. Give yourself the best possible chance of being approved for a mortgage by following these 7 simple tips:

  1. Check your credit score before making an application. There are many companies offering this service including Experian, Equifax and Callcredit (using the brand name Noddle).
  2. Once you have your report, check that your details are correctly logged. Even a slight error with your address can impact on your score.
  3. Check for fraudulent activity. Make sure that all of the noted credit accounts are familiar to you.
  4. Ensure that you are on the electoral role – this will boost your credit score
  5. If you don’t have any credit at the moment, take out a credit card. If you are using the card and repaying the balance on a monthly basis, this will boost your score. Lenders like to see that you are able to borrow and repay your debts in a controlled and timely fashion.
  6. Always pay your bills on time. This is more important than most people think as lenders can take a dim view of potential new customers who can’t stick to a regular payment plan.
  7. Keep your mobile phone contracts in order and never walk away from an agreement without ensuring that your service provider is satisfied that your account is up to date. This catches out many people and mobile phone companies are within their rights to report missed payments and overdue accounts.

Mortgage fees and interest rates will also vary depending on many factors including the size of your deposit. With hundreds of options to choose from, I would recommend that you speak with an independent mortgage adviser to ensure you are getting the best possible deal.

For more information on your credit score or mortgage requirements, please get in touch with our Property Department and we will happily pass you on to the relevant adviser.

Euan Stewart, property manager at Blackadders LLP

Euan Stewart, property manager at Blackadders LLP