Contributed post
Buying a house is the biggest investment that most of us will ever make, and doing so is a huge achievement. Since the recession any kind of borrowing has become more difficult, and along with high deposits requested from mortgage lenders it can mean first time buyers are at a considerable disadvantage.
However, owning your home isn’t impossible, and if you’ve ruled yourself out because of the following it’s time to think again!
You’re Self Employed
As a self employed person it was previously a little trickier to secure a mortgage. However, it’s becoming more and more widely accepted by lenders, and these days if you have three years proof of your accounts then this is often enough.
Some specialist lenders will even consider two, or one year of self employment although these are harder to find and you may pay higher rates.
However if you’ve always ruled yourself out as a potential homeowner because you work for yourself then you should reconsider. There are options out there available to you.
You Have Bad Credit
Having good credit can help you in so many ways in your adult life. However, few of us are perfect and many get in a pickle financially at some stage or another.
Maybe you overspent and got into debt when you were young as you didn’t understand the impact this would have on you later on. Perhaps you came up against an emergency situation, and needed to borrow money to move house, pay dental or medical bills or travel to an ill relative overseas and struggled with the repayments. It might just have been a case of you were managing your credit well but kept getting given credit limit increases and over time found you’d got yourself over committed.
Either way, life happens and there are lots of reasons you might not have a perfect credit score. Thankfully this doesn’t have to ruin your dream of becoming a homeowner, and there are companies that can help when mortgage declined by other lenders.
Of course, it makes financial sense to pay off your debts and get yourself into a stable position with money before looking to buy a home, but once you’re sorted again, blemishes from the past don’t need to ruin your plans.
You Don’t Have a Huge Deposit
Most mortgage lenders will require a deposit of at least 5% of the value of the property that you want to buy. This can amount to many thousands of pounds, and years of hard saving.
However you might not need quite as much as you thought, with things like the government’s ‘help to buy’ scheme and ISAs which boost your savings by twenty five percent. There is some help out there if you’re a first time buyer, so it’s worth checking to make sure you’re claiming what’s available and taking advantage of any offers or schemes.
You’re On Maternity Leave
Applying for a mortgage on maternity leave is about finding the right lender. Some won’t take your full income into account, however there are others that will.
The lenders that accept maternity income will likely only be happy to lend on that basis. Of course, you have the option of waiting until you return to work, but if you want to buy and have your house sorted by the time that happens then you do have the option of applying on maternity leave if you want to.
You’re A little Older
Since mortgages are spread over many years, often over twenty five years, when you’re later in life it can be difficult to get accepted.
Once you reach age fifty your mortgage options do tend to change, however again it’s not impossible to secure one. Most lenders will have an upper age limit for taking out new mortgages and another for paying them off, however you can apply for shorter terms for example ten years instead of twenty five. If you have pension and investment income, you can usually secure a mortgage later in life if you’re able to prove this.
If you have the ability to overpay on your mortgage, doing so when you’re able can be worthwhile as you can get it paid quickly and you’ll also pay less overall due to the interest.
Had you ruled out becoming a homeowner based on any of these things?