When you’ve decided that it might be time to buy your first home, stop. Look and listen (well, read). Yes, you may be ready to finally move out of your rented home or out of your parent’s house, but the truth is, it may not be the right time for you to get a mortgage. Why? Because we said so…
Just kidding. It’s actually because there are a lot of factors that make up when it’s the right time for you to buy and move. So, in this post, Zing are going through how you know when it’s the right time to get your mortgage. We’ll be looking at 4 indicators that it’s time to get a mortgage. Find out when is the right time, right here.
There are a few factors that decide whether it’s the right time for you to get a mortgage:
Do you have a sufficient income to sustain mortgage repayments? Your lender will subject you to affordability checks, to see if you can afford the mortgage you’re asking for. A lower income means you may not be able to secure the mortgage amount you require. If you’re self-employed, taking a look at your declared income will definitely need to be something you consider, as most lenders will take an average of up to 3 years. If you’re buying with someone else and getting a joint mortgage, both your incomes will be taken into consideration when a lender is assessing you’re ability to sustain the mortgage you want.
Another thing that will come up when you apply for a mortgage is your credit score. Lenders want to ensure that your credit score meets their standards before offering you a mortgage. Your credit score is essentially your financial footprint, a digitised score of how efficient you are at repaying credit, which comes in the form of household bills, mobile phone contracts, credit cards and loans. If your credit score isn’t high or graded as ‘good’, you may not meet some lenders criteria. So, before you consider getting a mortgage, make sure your credit score is up to scratch – you’ll be better off and considered a lower risk borrower.
You’ll need to put down a deposit before you can secure a mortgage. The more deposit you can put down, the lower your mortgage payments will be. Some lenders will require a minimum of 25% deposit, however, there are some lenders that will offer you a mortgage with as little as 5% of your house’s purchase price! If you haven’t got the absolute minimum deposit, then right now is probably not the right time. But, if you have, why not wait? (If you can) Save more for your deposit. The more you can put down initially means the less you’ll have to pay back over your mortgage term and the better the rate you’ll be offered. Your level of deposit is a defining factor in the timing of your mortgage.
This is one thing that is out of your control. Whilst you can make sure that your income, credit score and deposit meet a lender’s requirements, you cannot control the state of the economy or the housing market. If the economy or the housing market isn’t great or as strong as it used to be, getting your first mortgage or moving further up the ladder may not always be the best move. But, that said, as a purchaser, it may put you in a good position to be negotiating prices.
So, if you’ve got a good income, a good credit score and a reasonable deposit and the external factors are looking good too, then it may be the right time for you. Which means, it’s the right time to talk to us.
Even if you can’t tick off all the above factors, there is no better way to purchase a property than planning ahead. Even if you’re not in the position to buy right now, we can help advise you on the next steps you should take to put you in a good, strong position to buy for when you are ready.
If you think you’re ready to make your way into the housing market and get your first mortgage, or simply what to get some professional advice, speak to us. We’ll be able to find you a mortgage deal that’s right for you.