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5 tips to help you buy your dream new home

Buying a new home is an exciting decision. However, amongst the thrill of starting a new chapter and designing your dream home, handling the legalities and financial aspects of the buying process can be daunting.

To improve your buying odds and make the process as seamless and stress free as possible, it’s important to get your financial resume into shape.

If you’re looking to buy your dream home, here’s 5 things to keep in mind.

1. Avoid bouncing around jobs

Employment history and income are big factors that lenders will look at for your mortgage application. Moving to a new job may be a good career move, but if you’re planning on buying a new home be aware it can be a red flag to underwriters.

A steady job history with as little gaps or changes as possible, over at least two years is ideal. This helps the lenders to forecast your future income better. If you do get offered a job that you can’t refuse, make sure you inform your lender as soon as possible. It doesn’t mean you will get refused a mortgage, it’s just that you may need more documentation.

Also, moving from self-employment or a commission based role to an employed/salaried role will certainly sway in your favour with a lender.

2. Cut out any unnecessary payments

Are you guilty of having lots of monthly payments for items you probably could live without? Subscriptions for magazines, Netflix, recipe boxes – the list could go on. This is the time to go through your monthly outgoings and put a stop to the things you don’t need right now. Every little bit saved from cutting these outgoings out will be a bit more towards your new home!

3. Check your credit

Your credit score can be a deal breaker when it comes to getting accepted for a mortgage. A low credit score can affect how much you will be able to lend as well as the interest rates you are given. Even just a few percentage points difference on an interest rate can end up costing you thousands over the length of the loan.

Keep a close eye on your score, make sure you do everything you can to improve it and keep it in the green, including watching for any fraudulent activity on your account. If you are unsure of your score, sign up to a score reporter such as Experian or ClearScore who can give you a breakdown of your score and identify any issues you can work on.

4. Get a good credit history

A lender will always look at your credit history first. They ideally want to see that people who have borrowed credit such as credit cards and loans have a history of paying on time. This signals that the individual is a responsible borrower and therefore less of a risk.

If you have never had any credit your chances of securing a mortgage could be challenging but not impossible. Records of paying rent, bills, student loans, or mobile phone bills could be put forward as evidence to show a potential lender that you have a good track record of paying bills regularly and on time.

5. Avoid splashing out

You really want to avoid taking on any large debts just before buying a house. Things like buying a car can cause you problems. Even if you have been pre-approved already for a mortgage it is advised to avoid any large purchases. Your debt-to-income ratio can significantly affect how much money a lender is willing to give you. If you keep your debts to a minimum it will help make buying your dream home a lot smoother.

If you’re looking to transform your home and make your dream into a reality, please get in touch to find out about our Architectural Design and Project Management services:

info@greenstone-design.co.uk

01430 860 867

07845 175 262

5 tips to help you buy your dream new home