Keep the Avocado Toast – Mortgages for Millennials
The mortgage. For many young adults under 30 this is a pipe dream. But does it have to be? Here are a few tips on how to get on the property ladder for first time buyers.
Don’t wait! – The earlier you look into mortgages the better. Sure, buying a place might not be on your radar right now, but fast forward a couple of years and things may have changed. You don’t have to find a property to agree a mortgage in principle. Look around and find the best option for you so when the day comes you’re already prepared!
You don’t need to stick with your current bank – Don’t be afraid to branch out (pun intended) when it comes to agreeing a mortgage. Your current bank might not have the best options for you. Again, this may seem obvious, but so many prospective buyers are bogged down in the mindset that they need to opt with their current bank and that is not case! Which brings us nicely onto our next point…
There’s variety in mortgages – The majority of the time a deposit will be required for your mortgage. The average deposit amount for first time buyers is generally around 15% of the property’s value. However, some mortgage lenders will lend the entire cost of the property. This will incur larger repayments and will likely require guarantors, but the options are there. This is why it’s important to do your research!
Take help from the government while you can – The Help to Buy ISA introduced by the government ceases on November 30th this year, so take advantage of this while you can. First time buyers can save up to £200 per month in their Help to Buy ISA, with the government topping up what you’ve saved by 25%. The good news is that you can activate your ISA even by depositing a measly pound. Although if you’ve got a bit of savings to spare you can deposit up to £1200 in the first instalment – which is worth it if you can as it’s your only opportunity to put in a larger sum than the £200 a month. What’s more is that once the ISA is activated, you have until December 1st 2030 to continue saving, by which time you must claim your bonus.
Start saving ASAP – This may seem like a no-brainer, but it’s so easy to put off saving until you’re in a better financial situation. It doesn’t have to be much to begin with, but once you’ve set up your ISA or savings account why not set up a monthly standing order so you’re constantly and consistently saving? Even if it’s not much to begin with this will accumulate quicker than you think. You can then up the amount when it suits you. You’re also able to take money out without being penalised so if you find yourself in a sticky financial situation, you still have access to your money.
These tips may seem basic, but they ring true. With a plan and proper organisation you could be on the property ladder before you know it!