For so many people, that first rung of the property ladder seems much too high. They feel as if they will be stuck in the cycle of renting forever. However, there are plenty of things that you can do to give yourself the best chance of securing your first property. Here are five ways you can get on the property ladder.
1. Find out how much deposit you need
First, establish how much money you already have to put towards a new home. This may involve you triggering a severance of joint tenancy to release capital you already hold in another property. The legal process for doing that is detailed here: https://www.parachutelaw.co.uk/severance-of-joint-tenancy. Sometimes a family member will be willing to do this to help you with the deposit.
2. Save for a deposit
According to the Money and Pensions Service, it is always worth taking the time to manage your money. By putting a long-term plan in place, you can cope with both your current and future financial needs. Start by adding up all of your outgoings (perhaps on a spreadsheet) and investigating where you can make savings.
3. Find the best deal
There are loads of mortgage deals on the market and it can get confusing. The one with the lowest monthly payments may not be the best deal for you. Hidden costs and fees can increase the overall amount that you will pay. A mortgage broker can give you independent advice but you can start by using online calculators.
4. Investigate your credit score
You want to make sure that nothing will get in the way of your mortgage application. When you apply, the mortgage provider will carry out a credit search on you and this is when some people run into trouble. Perhaps you have an unpaid phone or utility bill that needs attention?
5. Find government schemes to help you
The UK government recognises that it is hard for many people to get on the property ladder and has developed schemes to help them. It is worth looking carefully at these in case any of them can help you. There is a ‘shared ownership’ scheme where you co-own a home with a Housing Association. Also, there are ‘Help to Buy’ schemes where the government will lend you up to 20 percent towards a new-build home.
